PRST 87222

“Buffo will cure your headache” the ad reads. Buffo, like other pain relievers, helps most people feel better, but it does not cure headaches, it just helps hide the pain, and it does not prevent future headaches. Under the FTC deceptive advertising standard, this ad is:
a. not deceptive if the FDA has approved the ad
b. not deceptive only if the company can document that Buffo in fact does cure headaches
c. deceptive because products involving medicines must have very accurate ads
d. unfair to competitors who do not make such strong claims about their products
​e. none of the other choices

Bankruptcy discharge is:
a. illegal
b. when a third party steps in to pay the debtor’s debts
c. when creditors forgive all debt
d. the final stage of the bankruptcy proceeding for individuals
​e. none of the other choices are correct

In reviewing employment discrimination cases, the Supreme Court has noted that the employment relationship is rooted in agency law so vicarious liability can be imposed on the employer for discriminatory practices not properly controlled.
a. True
b. False

What financial disclosure report is not required of traded securities regulated by the SEC?
a. a monthly 8-K report
b. a quarterly 10-Q report
​c. a biannual 8-Q report
d. an annual 10-K report
e. all of the other choices are required

Defenses of insanity and intoxication in criminal cases:
a. are rarely successful
b. apply to about twenty percent of cases
c. are not allowed in Class A felony cases
​d. are not allowed in misdemeanor cases
e. none of the other choices

The doctrine of strict liability in tort applies primarily to cases of manufacturing defect, failure to warn, and to design defects.
a. True
b. False

Congress adopted the UCC in the early 1950’s to facilitate trade and reduce the confusion caused by different common law rules in different states.
a. True
b. False

A territorial restrictions, such as Pepsi telling its bottlers where they can sell and deliver Pepsi, is per se illegal under the Clayton Act.
a. True
b. False

The are the “rules” that regulate and govern the internal operations of the corporation.
a. the certificate of incorporation
b. the bond
c. the corporate constitution
​d. statutes of business
e. none of the other choices are correct

Implied authority consists of:
a. the power to do whatever is reasonable and customary to carry out the agency purpose
b. the power to mingle the funds of the agent and principal
c. limits on an agent’s actions, so that the agent may only do what the principal orders, in writing or orally
​d. the power of the agent to withhold services if the principal fails to pay her
e. the power of an agent to do whatever is authorized by the Uniform Agency Act

Refer to Fact Pattern 13-1. An advantages for Jeanette of incorporating is that:
a. she has unlimited liability for corporation debts b. the corporate veil may never be pierced
c. she has limited liability for corporation debts
d. she is taxed personally for all corporation profits
e. she must dissolve the corporation before she adds new members to the firm

Which of the following is included in the business format category of franchises:
a. restaurants
b. nonfood retailers
c. business services
​d. rental companies
e. all of the other specific choices are correct

In a suit for intentional misrepresentation, punitive damages may be awarded.
​a. True
b. False

Even if misrepresentation is innocent, the party who engaged in misrepresentation is liable for losses suffered by the party who received the bad information.
a. True
b. False

Some litigation in federal court is there because of the parties involved. In such cases it is most likely that:
a. a foreign citizen is involved
b. the United States is a party to the suit
c. citizens of different states are involved
d. two or more states are parties to the suit
​e. any of the other choices may be correct

Double taxation on profits is:
a. a disadvantage to the corporate form of organization
b. an advantage to the corporate form of organization
c. an incentive for governments to lower sales taxes for corporations
​d. a driving force behind the trend of businesses moving overseas
e. a clever economic strategy

are drafts that mature on the payment date set in the future.
a. Balloon drafts
b. Delayed drafts
​c. Lapsed drafts
d. Real estate drafts
e. none of the other choices are correct

Because the NLRB is a politically sensitive government agency, appointments to the board tend to reflect partisan politics.
a. True
b. False

The UCC requires less formality than does the common law of contracts.
​a. True
b. False

Fernando owes Lucia $8,000. They both realize he is unlikely to be able to repay that much, so Lucia says: “Pay me
$5,000 and we’ll call it good.” Fernando pays the $5,000. This settlement is called:
a. preexisting duty
b. liquidated debt
c. unliquidated debt
​d. rescission
e. none of the other choices

Illinois passes a law requiring all restaurants in the state to buy 5% of all foods they use from Illinois food companies. This does not violate the commerce clause.
a. True
b. False

The prevents unnecessary lawsuits by giving the agency the full chance to get the decision right.
​a. substantive determination doctrine
b. standing doctrine
c. judicial doctrine
d. judicial review doctrine
e. none of the other choices are correct

When a person in a position of trust steals money it is the crime of bribery.
​a. True
b. False

When the FTC proposes a trade regulation rule, it must be published in the Federal Register for public inspection before it becomes effective.
a. True
b. False

Under the common law, an acceptance cannot deviate from the terms of the offer without being considered either a rejection or a counteroffer. Under UCC Article 2:
a. an acceptance is not valid if the offeree’s acceptance contains different terms from those in the offer
b.an acceptance is valid when the parties intend to form a contract⎯even thought he offeree’s acceptance
contains different terms from those in the offer
c. an acceptance is only valid if it occurs in writing
d. an acceptance is only valid if it is communicated verbally
e. an acceptance is only valid if it is made within 3 months of the offer

A lease should describe the premises and state how long it will be in effect.
​a. True
b. False

The allows a debtor to retain the family home up to a specified amount free from creditors’ claims. a. nonexempt exemption
b. necessity exemption
c. homestead exemption d. mortgage exemption e. housing exemption

In Lawler v. Montblanc North America, where Lawler was fired soon after telling her supervisor that for medical reasons she could not work more than 20 hours per week the appeals court held she could sue the employer for mental distress.
a. True
b. False

Fern TV sells Ryan a 52″ plasma television. Ryan does not have the cash necessary to buy the TV, so Fern allows him to make 12 monthly payments. If Ryan misses any payments, Fern may take the TV back. Fern:
a. is an unsecured creditor
b. has a security interest
c. is a perfected debtor
d. is an unsecured creditor with a perfected interest
​e. none of the other choices

A practice of engaging in price discrimination in different markets in an attempt to undercut competitors is known as:
a. boycotting
b. the offense of meeting the competition
​c. retailer cartelization
d. exclusive dealing
e. none of the other choices