Under the __________ view of the firm, resources can be a source of competitive
advantage if they are __________.
a. resource-based, rare
b. systems-based, hard to copy
c. resource-based, available to competitors
d. systems-based, available to competitors
Answer:
Which of the following is true regarding incorporation?
a. A corporation must be incorporated in the state in which it has its principal place of
business.
b. Laws regarding incorporation and the rights and duties of corporations are uniform
from state to state.
c. Since the mid-1930’s, Delaware has been considered the preeminent state for
incorporation.
d. Incorporation may be done pursuant to common law as well as statute.
Answer:
If the contracted goods are unique and fail to be delivered, the buyer can ask a court
under 2-716 of the UCC to order:
a. allocation of risk of loss.
b. consequential damages.
c. cover.
d. specific performance.
Answer:
States vary in their willingness to enforce noncompete agreements.
a. True
b. False
Answer:
A __________ interest rate fluctuates throughout the life of the loan according to the
interest rate that the lender would pay if it borrowed the funds in order to relend them.
a. fixed
b. principal
c. base
d. floating
Answer:
CASE 3O’Shea v. Welch (2003)involved a question of whether Welch, an employee,
was acting within the scope of his employment when he struck O’Shea’s car. How did
the court find and why?
a. The court found that as a matter of law the employee was not acting within the scope
of his employment because he was involved in a frolic of his own.
b. The court found that as a matter of law the employee was not acting within the scope
of his employment because he was involved in a detour.
c. The court found that as a matter of law the employee was acting within the scope of
his employment because he was involved in only a detour, not a frolic on his own.
d. The court found that the jury should determine whether the employee was acting
within the scope of his employment during the time period at issue.
Answer:
In the European Union, the principal rules of competition law are set forth in which of
the following?
a. The Treaty of Amsterdam and the Merger Control Regulation
b. The European Union Regulation and the Treaty of Amsterdam
c. Only the European Union Regulation
d. Only the Treaty of Amsterdam
Answer:
Corporations must incorporate in the state where their headquarters are located.
a. True
b. False
Answer:
Reliance damages are awarded in addition to expectation damages.
a. True
b. False
Answer:
Which of the following is true regarding assault?
a. Assault is an intentional, nonconsensual act that gives rise to the apprehension that a
harmful or offensive contact is imminent.
b. Assault is an intentional, nonconsensual act that gives rise to the fear that a harmful
or offensive contact is imminent.
c. Assault is a negligent, nonconsensual act that gives rise to the apprehension that a
harmful or offensive contact is imminent.
d. Assault is a negligent, nonconsensual act that gives rise to the fear that a harmful or
offensive contact is imminent.
Answer:
Principals may be held liable for the torts of independent contractors involving highly
dangerous acts.
a. True
b. False
Answer:
The members of the European Parliament are elected by the __________ of the member
states.
a. legislative branch
b. executive branch
c. citizens
d. Council of Ministers
Answer:
The term __________ is used to describe a nonpracticing entity that purchases one or
more patents with the intent to enforce the patents against infringers, rather than to
manufacture a patented product or supply a patented service.
a. patent troll
b. illegal user
c. patent hoarder
d. patent stasher
Answer:
The “Inside Story” focuses on Employers’ Policies Regarding Employees’ Use of Social
Media. The NLRB issued guidelines to protect employees’ use of social media,
especially concerning:
a. concerted activity under Section 7 of the NLRA, including communication to each
other about wages, hours, and working conditions.
b. concerted activity under Section 12 of the NRLA, including communication to each
other about wages, hours, and working conditions.
c. unfair labor practices under Section 1 of the NRLA, including retaliation emails.
d. a public sector employee’s right to freedom of speech and collective bargaining
information.
Answer:
Benji, a truck driver, is told by his boss, Penny, to quickly deliver a load of steel and to
get to the location within an hour regardless. Benji replied, “That’s impossibleI’d have
to go 90 miles per hour to do that.” Penny said, “Well, you’d best get started.” Not
surprisingly, Benji was stopped by a highway patrol officer and fined for both speeding
and reckless driving. When he went to court, Benji told the judge that he should be
found innocent because he was only acting upon orders of his boss, Penny. Is Benji
correct?
a. Yes.
b. No.
c. Yes, but only if he can establish that he had a written contract obligating him to
follow Penny’s orders.
d. Yes, but only if he has no previous record of speeding.
Answer:
The plaintiffs in theWilliamson Oil Co. v. Philip Morris USA case discussed in the
text,alleged that tobacco companies had conspired to fix prices. How did the court rule?
a. The suit was dismissed because the plaintiffs could not establish any “plus factor”
needed to proceed.
b. The suit was allowed to proceed because no “plus factor” was needed.
c. The suit was allowed to proceed because “plus factors” were established by plaintiffs.
d. The suit was dismissed because the plaintiffs lacked standing.
Answer:
In a __________ financing transaction, the second lender lends the owner the additional
funds and agrees to take over the servicing of the first loan.
a. permanent
b. wraparound
c. mortgage
d. deed of trust
Answer:
CASE 2,EEOC v. Abercrombie & Fitch Stores, Inc. (2013) involved a question of
whether a clothing retailer violated Title VII when it refused to hire a Muslim
woman-applicant because she wore a head scarf in violation of its company dress code,
and whether the applicant gave proper notice of a religious accommodation. How did
the court rule?
a. That the employer did not violate Title VII becausethe employer did not have to
accommodate the wearing of the scarf because wearing the scarf involved a cultural
practice, not a practice required by the potential employee’s religion.
b. That the employer did not violate Title VII becausethe employer did not have to
accommodate the wearing of the scarf because the employer established that it did not
involve a sincerely held religious belief on the part of the potential employee.
c. That the employer did not violate Title VII becausethe employer did not have to
accommodate the wearing of the scarf because such accommodation would place an
undue hardship on the employer.
d. That the employer did not violate Title VII because the applicant failed to give proper
notice of a religious accommodation.
Answer:
Fact Pattern 6-1
Bruce had a disagreement with a new federal agency set up to give additional funds for
college to individuals with an aptitude for math. After a hearing, the agency determined
that Bruce had no aptitude for math and that he would not receive any funding. Bruce,
however, was not discouraged. He told his friend Laura, who just graduated from law
school, that he would simply appeal the decision to federal court, have the judge do a
fresh review, and provide additional information to the judge regarding his math
aptitude that the agency did not have. He feels certain that he will win at the federal
court level.
Refer to Fact Pattern 6-1. What should Laura tell Bruce regarding his plan to provide
additional evidence to the federal court judge?
a. That his plan is a good one and that the judge will consider the additional evidence.
b. That judicial review will likely be confined to the record compiled before the agency.
c. That he will only be allowed to present sworn affidavits for additional judicial
review.
d. That he will only be allowed to present additional test scores for additional judicial
review.
Answer:
Termination fees are sometimes characterized as liquidated damages.
a. True
b. False
Answer:
Intent cannot be implied.
a. True
b. False
Answer:
Title VII has been successfully used to challenge English-only workplace rules.
a. True
b. False
Answer:
Fact Pattern 11-1
Samantha develops a new type of comb that effectively removes loose dog hair and
eliminates problems with shedding. Samantha had never seen such a comb on the
market and was very surprised when she received notification that she was being sued
for patent infringement by the holder of a patent on a similar type of comb. Samantha
investigates and determines that the earlier patent was valid. Her friend Harry, a first
year law student told her that she could not be guilty of patent infringement because she
was not aware of the earlier patent, and that she should proceed to at least sell the rest
of her inventory.
Refer to Fact Pattern 11-1. Assuming the validity of the earlier patent, which of the
following is true regarding Harry’s statement that Samantha could not be guilty of
patent infringement because she was unaware of the earlier patent when she began
marketing her combs?
a. Harry was correct.
b. Harry was incorrect, and Samantha can be held liable for direct patent infringement.
c. Harry was incorrect, and Samantha can be held liable for indirect patent
infringement.
d. Harry was incorrect, and Samantha can be held liable for contributory patent
infringement.
Answer:
In CASE 20.1Smith v. Van Gorkom (1985) discussed in the text,plaintiff-shareholders
alleged the directors were grossly negligent in failing to inform themselves adequately
before making a decision about a merger. How did the court rule and why?
a. For plaintiff-shareholders, because the board failed to obtain adequate information on
merger terms and therefore was not protected by the business judgment rule.
b. For directors, because the board was protected by the business judgment rule since
there was no conflict of interest.
c. For the directors, but the board was not protected by the business judgment rule but
rather by the business merger rule.
d. For the directors, because the board was protected by the business judgment rule
since fraud could not be established.
Answer:
Regarding drug testing, the Fifth Amendment’s ban on unreasonable searches and
seizures applies only to governmental activity.
a. True
b. False
Answer:
To comply with their duty of loyalty, directors and managers must subordinate their
own interests to those of the corporation.
a. True
b. False
Answer:
Under the __________ doctrine, the outcome of a diversity case in federal court will be
similar to the outcome in a state court because the same substantive law will govern
either adjudication.
a. Erie
b. common law
c. venue
d. substantial activity
Answer:
In CASE 24.1Awad v. Ziriax(2012),Oklahoma passed the “Save Our State Amendment”
which provided that Oklahoma courts could not consider international or Sharia law in
making decisions. Awad, a muslim, was the executive director of the state chapter of the
Council on American-Islamic Relations and sued. How did the court rule and why?
a. The court dismissed Awad’s lawsuit, holding that the First Amendment’s Free
Exercise clause does not apply to Muslims.
b. The court dismissed Awad’s lawsuit, holding that he had no standing to challenge the
law.
c. The court ruled for Awad, holding that the amendment violated Awad’s First
Amendment Right to Free Exercise of Religion was violated.
d. The court ruled for Awad, holding that Awad’s right to Due Process and Equal
Protection was denied by the amendment.
Answer:
The Smith v. Van Gorkam decision underscores which of the following regarding
statements of officers or directors?
a. An outside director, but not an inside director, may in good faith rely upon any
statement of an executive officer.
b. An inside director, but not an outside director, may in good faith rely upon any
statement of an executive officer.
c. Any director may in good faith rely upon any statement of an exeecutive officer.
d. Not every statement of an executive officer can be relied upon in good faith.
Answer:
Which of the following is true regarding the use of genetically modified foods
internationally?
a. The European Parliament refused to approve legislation requiring the labeling of
genetically modified foods.
b. Australia requires the labeling of genetically modified food, but New Zealand does
not.
c. New Zealand requires the labeling of genetically modified food, but Australia does
not.
d. The European Parliament required the labeling of genetically modified foods, and
Australia and New Zealand also require the labeling of genetically modified foods.
Answer:
__________ gives the President a type of legal immunity which protects against the
forced disclosure of Presidential communications made in the exercise of executive
power.
a. Immunity privilege
b. Federal privilege
c. Executive privilege
d. Mandated privilege
Answer:
Which of the following is true regarding USDA standards for organic food?
a. Neither pesticides, genetic engineering, growth hormones, nor irradiation may be
used.
b. Pesticides may be used, but genetic engineering and the use of growth hormones is
disallowed.
c. Pesticides and irradiation may not be used, but genetic engineering and the use of
growth hormones is allowed.
d. The USDA has no standards for organic food.
Answer:
Federal diversity jurisdiction requires that litigants be residing in at least three different
states.
a. True
b. False
Answer:
Which of the following is true regarding who can sue under Rule 10b-5?
a. Only those who purchased the securities at issue may sue.
b. Only those who sold the securities at issue may sue.
c. Only those who have actually purchased or sold the securities at issue may sue.
d. Anyone who either actually purchased or sold the securities at issue, and also anyone
who can prove that he or she would have purchased or sold the securities at issue had
they known the true facts may sue.
Answer:
In 2013, the SEC proposed an amendment to the Dodd-Frank Act, which requires
disclosure of the pay ratio of the median of the annual total compensation of all
employees to the annual total compensation of the CEO.
a. True
b. False
Answer: