A prospectus is a selling document as well as a disclosure document.
a. True
b. False
Answer:
Which of the following requirements is not required by a corporation to qualify for S
corporation status?
a. The corporation must have only one class of stock.
b. The corporation must file a timely election signed by all the shareholders to be
treated as an S corporation.
c. The corporation must have no more than twenty-five shareholders.
d. The corporation must be a domestic corporation.
Answer:
In a(n) __________ listing, the listing broker will receive a commission only if he or
she procures a ready, willing, and able buyer.
a. exclusive
b. open
c. net listing
d. broker
Answer:
The U.S. Department of Agriculture inspects facilities engaged in egg production.
a. True
b. False
Answer:
In order to find a violation of the Sherman Act, courts require evidence of an explicit
agreement to violate the law.
a. True
b. False
Answer:
Which of the following statements is not true regarding the characteristics of a
corporation?
a. A corporation is a legal entity distinct from its owners.
b.A corporation is owned by shareholders.
c. The corporation itself is responsible for its liabilities.
d.The board of directors implements the decisions of the officers.
Answer:
__________ are items of personal property attached to real property that cannot be
removed without substantial damage.
a. Connectors
b. Relaters
c. Entanglements
d. Fixtures
Answer:
Which of the following is true regarding taxation of losses of a C corporation?
a. The operating loss is passed on to shareholders, but the corporation itself does not
realize any benefit.
b. The operating loss is recognized at the corporate level, and shareholders also receive
a tax benefit.
c. The operating loss will be recognized at the corporate level, shareholders receive no
tax benefit, and the corporation receives no benefit until it has operating income against
which its prior losses can be deducted.
d. The operating loss is not recognized at the corporate level; and although shareholders
may receive a deduction, they must wait until they receive some amount of profit from
the corporation at which point they can deduct up to 10% of the losses per year.
Answer:
Fact Pattern 16-2
Number One Oil Company sells gas to various gas stations. Number One requires that
the gas stations agree that they will not sell gas above a certain maximum price set by
Number One. Some of the gas stations are unhappy with the arrangement because they
wish to sell gas at any price they choose. Unfortunately for them, other oil companies in
the region also impose maximum price restrictions. The station owners begin
investigating whether any antitrust violation could be involved.
Refer to Fact Pattern 16-2. Which of the following is true regarding whether the
imposition of maximum prices under the facts presented would be an antitrust
violation?
a. The U.S. Supreme Court has ruled that such restrictions do not violate federal
antitrust law.
b. The imposition of maximum pricing restrictions is per se illegal under federal
antitrust law.
c. A rule of reason approach is used in determining whether the imposition of maximum
prices is illegal under federal antitrust law.
d. A presumption of reasonableness approach is used in determining whether the
imposition of maximum prices is illegal under federal antitrust law.
Answer:
If a purchase or sale by an officer, director, or greater-than-10 percent shareholder that
would otherwise result in recoverable short-swing profits was involuntary and did not
involve the payment of cash and if there was no possibility of speculative abuse of
inside information, than a court may hold that it was a(n) __________ to which no
liability will attach.
a. innocent transaction
b. approved negotiation
c. unorthodox transaction
d. designated sale
Answer:
Fact Pattern 2-1
Jack decides to donate leftover food from his restaurant to a homeless shelter. Brock, an
employee who was angry with Jack over not getting a raise, claimed that Jack decided
to donate the food only for publicity and that Jack did not really care about homeless
people. Peggy, another employee disagreed, contending that regardless of his
motivation, Jack was acting ethically because of the consequences involved and the
number of people helped.
Refer to Fact Pattern 2-1. Upon which of the following would Jack most likely rely in
contending that he donated the food because he was motivated to help the poor?
a. Rawlsian moral theory
b. Teleological theory
c. Artificial person application
d. Deontological theory
Answer:
Fact Pattern 12-2
Paige is 64 years old and would like to retire from her job at a large accounting firm.
She, however, is concerned about health insurance. She would not be eligible for
Medicare benefits until age 65, and due to some serious health conditions, she would
not be able to obtain insurance in the private market. She has good health insurance at
the accounting firm and is considering putting off her retirement so that she can keep it.
Refer to Fact Pattern 12-2. Which of the following would likely enable Paige to keep
her insurance with the accounting firm until she is eligible for Medicare?
a. The Health Insurance Portability and Accountability Act
b. The Consolidated Omnibus Budget Reconciliation Act
c. The Employee Security Act
d. The Insurance Protection Act
Answer:
Scienter requires more than mere negligence or lack of due care.
a. True
b. False
Answer:
As a matter of law, a combination of two inventions cannot be considered nonobvious.
a. True
b. False
Answer:
Employers must complete a(n) _____ form showing verification of the identity and
employment eligibility of all persons hired.
a. A-12
b. I-9
c. Imm.1
d. A1
Answer:
Which of the following is true of the death penalty in China?
a. More than 60 crimes carry the death penalty including tax fraud and bribery.
b. Less than 5 crimes carry the death penalty because it is limited to crimes involving
the most serious offenses such as murder.
c. While it is currently in effect for some crimes, it is outlawed beginning in 2015.
d. The death penalty is currently outlawed.
Answer:
A court will require an agency to comply with its own procedural rules and thus
conform to the:
a. due process clause.
b. Seventh Amendment.
c. both the due process clause and the Seventh Amendment.
d. neither the due process clause nor the Seventh Amendment.
Answer:
A firm’s illegal conduct has no bearing on the firm’s competitive advantage because it
does not necessarily divert funds form strategic investments or affect its image and
reputation with its customers.
a. True
b. False
Answer:
A defendant is not liable for trademark infringement if its use is __________ use,
meaning that it uses the mark to talk about the mark itself.
a. comparative
b. transformative
c. unclear
d. nominative
Answer:
The Fair Labor Standards act does not limit the number of hours that an employee may
work in a workweek or workday, as long as the employee is paid appropriate overtime.
a. True
b. False
Answer:
Which of the following statements regarding the teleological theory is NOT true?
a. Teleological theory is concerned with consequences.
b. Teleological theory judges the ethical good of an action by the effect of the action on
others.
c. Teleological theory focuses more on the motivation and principle behind an action.
d. Both that teleological theory is concerned with consequences and that teleological
theory judges the ethical good of an action by the effect of the action on others.
Answer:
In theIllinois Tool Works, Inc. v. Independent Ink, Inc.case discussed in the text,the
question was whether a patented product in a tying arrangement creates a presumption
of market power in that product.
a. The court upheld earlier law and ruled that the existence of a patent in a tying
arrangement creates a presumption of market power.
b. The court ruled that a tying arrangements involving a patented product should be
evaluated under the rule of reason standard rather than under the per se rule.
c. The court ruled that a tying arrangements involving a patented product should be
evaluated under the per se rule rather than under the rule of reason standard.
d. Overturning prior law the court ruled that the matter was irrelevant because all tying
arrangements are illegal regardless of whether or not a patented product is involved.
Answer:
In CASE 12.1Perez v. Progenics Pharmaceuticals, Inc.(2013) plaintiffPerez was a
chemist who was fired after issuing a memo disputing the company’s public
representations to shareholders, calling it “fraud” and “illegal.” Perez sued claiming his
termination was in retaliation against him, in violation of Sarbanes-Oxley.
a. True
b. False
Answer:
Fact Pattern 4-2
Wally, a law school student, is an intern for Rebecca, an assistant professor who is
attempting to get tenure at Imperial Law School in part by getting an article published
on the right to a jury trial. Rebecca asks Wally to explain to her the right to a jury trial
under the U.S. Constitution as applied to jury trials involving state law.
Refer to Fact Pattern 4-2. Which of the following sections of the U.S. Constitution
should Wally reference when discussing the matter of the right to a jury trial with
Rebecca?
a. The First Amendment
b. The Fifth Amendment
c. The Seventh Amendment
d. Article One, Section Eight
Answer:
Intent may be transferred.
a. True
b. False
Answer:
To which of the following does the term “battle of the forms” refer?
a. The situation in which one of the parties wishes to use a preprinted form, but the
other party wishes to engage in direct negotiation.
b. The situation in which the parties entered into a formal contract, but the contract has
been misplaced by both parties resulting in uncertainty regarding the exact terms of the
original contract.
c. The situation in which parties have neglected to bargain over items and then
exchange standard printed forms resulting in confusion regarding the terms of the
contract.
d. The situation in which a party wishes to claim unconscionability based upon another
party’s use of a preprinted form.
Answer:
Which of the following refers to a merger in which some shareholders are required to
surrender their shares in the disappearing corporation for cash?
a. Illegal merger
b. Termination merger
c. Surrender consolidation
d. Freeze-out merger
Answer:
The duty of __________ requires officers to exercise reasonable supervision over the
business affairs of the corporation.
a. care
b. loyalty
c. obedience
d. ethics
Answer:
Managers practicing __________ view the cost of compliance as a(n) __________.
a. value-based compliance management, investment rather than an expense
b. strategic compliance management, investment rather than an expense
c. resource-based management, expense rather than an investment
d. strategic-based risk management, investment rather than an expense
Answer:
In 1963, the state of __________ became the first state to adopt the __________ theory,
after the state supreme court decided the __________ case.
a. California, strict liability, Greenman v. Yuba Power Products
b. California, product negligence,Greenman v. Yuba Powder Products
c. New York, strict liability,Greenman v. Yuba Power Products
d. Florida, breach of warranty, Petito v. A.H. Robins Co.
Answer: