Street Bikes, Inc., makes and sells a bicycle to Theo. Street Bikes fails to exercise ‘due
care’ to make the bicycle safe, however, and Theo is injured as a result. Street Bikes is
most likely liable for
a. market-share liability.
b. none of the choices.
c. negligence.
d. product misuse.
Answer:
Merlin is a drug addict who has completed a supervised drug-rehabilitation program.
Nabil used drugs casually in the past. Both work for Omni Insurance & Investments
Inc. Considered to have a disability under the Americans with Disabilities Act of 1990
a. are Merlin and Nabil.
b. is Merlin only.
c. is Nabil only.
d. none of the choices.
Answer:
Lucas owns Muddy Flats Ranch in New Mexico. The exterior boundaries of the land
extend
a. 100 feet into the earth and 100 feet into the atmosphere.
b. one mile into the earth and one mile into the atmosphere.
c. to infinity and beyond.
d. to the center of the earth and up to the farthest reaches of the atmosphere.
Answer:
Discount Retail Corporation may be engaging in conduct that vioÂlates the Sherman
Act. To bring an action against the firm requires that its conduct have a sigÂnificant
impact on
a. international commerce.
b. Internet commerce.
c. interstate commerce.
d. intrastate commerce.
Answer:
Blaise is an officer with Core Business Services, Inc. Blaise is in a position to acquire
assets that would benefit the company if acquired in its name. Blaise’s usurping this
opportunity may violate the duty of
a. acting in one’s own interest.
b. agency.
c. care.
d. loyalty.
Answer:
Edge is a video game featuring interactive extreme sports. The graphics used in the
game are protected by
a. copyright law.
b. patent law.
c. trademark law.
d. none of the choices.
Answer:
Chaz uses his computer to secretly install software on thousands of personal computers
without their owners’ knowledge. The program can reproduce itself and spread from
one computer to another via any USB port. This program is a
a. hacker.
b. botnet.
c. virus.
d. worm.
Answer:
Comfort Foods Corporation makes and markets its products nationwide. To be
considered socially responsible when making a business decision, Comfort Foods must
take into account the needs of
a. its customers and the community only.
b. its employees and owners only.
c. its employees, owners, customers, creditors, suppliers, and the community.
d. no one.
Answer:
Lena offers Miguel a job, representing falsely that it will be long term. In reliance,
Miguel takes the job but is laid off shortly thereafter and sucÂcessfully sues Lena for
fraud. With respect to the employment-at-will doctrine, this is
a. an example of the doctrine.
b. an exception based on contract theory.
c. an exception based on public policy.
d. an exception based on tort theory.
Answer:
Tory borrows $10,000 from USA National Bank to remodel a room in her home. This
transaction is subject to
a. no federal law.
b. the Consumer Leasing Act.
c. the Consumer Product Safety Act.
d. the Truth-in-Lending Act.
Answer:
In the case of Retail Sales Corp. v. Trucking Delivery Co., the court may rule contrary
to a precedent if the court decides that the precedent
a. is incorrect or inapplicable.
b. is not in line with the judge’s personal values.
c. would lead to unintended consequences.
d. would not bring about the result the judge prefers.
Answer:
Bill’s Barber Supplies, Inc., is the major distributor of barber supplies in the state of
Colorado. Bill’s closest competitor is Dona’s Beauty Products Company, another
Colorado firm. They agree that Bill’s will distribute its products in western Colorado
and Dona’s will distribute its products in the eastern part of the state. This is
a. a group boycott.
b. a market division.
c. none of the choices.
d. a tying arrangement.
Answer:
To raise capital to form Business Apps Corporation with Cris, Dona sells bonds and
stock in other companies, and plans to register an initial public ofÂferÂing under the
Securities Act of 1933. SEC Rule l0b-5 covers
a. just about any form of securities.
b. only bonds.
c. only securities registered under the Securities Act of 1933.
d. only stock.
Answer:
The Montana Supreme Court rules against Natural Grocery Mart in a case against One
Stop 2 Shop Stores, Inc. Natural Grocery files an appeal with the United States
Supreme Court. The Court does not hear the case. This
a. is a decision on the merits that has value as a precedent.
b. indicates agreement with the Montana court’s decision.
c. means nothing.
d. means that the Montana court’s decision is the law in Montana.
Answer:
Korean Hot Dogs Inc. offers entrepreneurs the opportunity to operate a franchise under
the Korean Hot Dogs trade name as a member of a select group of dealers that engage
in retail fast food sales. To potential investors, the franchisor must provide
a. actual earnings figures.
b. hypothetical earnings figures.
c. projected earnings figures.
d. none of the choices.
Answer:
Fact Pattern 27-1
Natural Gas, Inc., and Olio Energy Company refine and sell natural gas. To limit the
supply of natural gas on the market and thereby raise prices, Natural Gas and Olio
Energy agree to buy ‘excess’ supplies from dealers and ‘dispose’ of it.Refer to Fact
Pattern 27-1. The Natural Gas and Olio Energy deal is
a. a deal that neither restrains trade nor harms competition.
b. a legal restraint of trade.
c. a per se violation of antitrust law.
d. subject to analysis under the rule of reason.
Answer:
Tech Personnel, Inc., is a corporation. Tech Personnel’s implied powers enable it to
a. none of the choices.
b. depart significantly from traditional corporate formalities.
c. bind the corporation to an action that will greatly affect its purpose.
d. borrow funds and lend funds.
Answer:
Information Security Inc. pays income and other taxes collected by the Internal
Revenue Service (IRS). Like other federal administrative agencies, the IRS was created
by
a. Congress, through enabling legislation.
b. the courts, through the adjudicatory process.
c. the U.S. Constitution, in Article I, Section 8.
d. the president, through an executive order.
Answer:
Fact Pattern 28-1
Dhani, an accountant for Eureka! Inc. learns of undisclosed comÂpany planÂs to
market a new laptop. Dhani buys 1,000 shares of Eureka stock. He reÂveals the
company plans to Fay, who tells Geoff. Both Fay and Geoff buy 100 shares. Geoff
knows that Fay got her informaÂtion from Dhani. When Eureka! publicly anÂnounces
its new laptop, Dhani, Fay, and Geoff sell their stock for a profit.Refer to Fact Pattern
28-1. Under the Securities ExÂchange Act of 1934, Geoff is most likely
a. liable for insider trading.
b. not liable because Geoff is only a tippee, not a tipper.
c. not liable because Geoff is too far down the chain of disclosure.
d. not liable because Geoff traded on the basis of a material fact.
Answer:
QuikPay Inc. extends credit to consumers. QuikPay is subject to the Equal Credit
Opportunity Act, which prohibits credit disÂcrimination based on
a. intelligence.
b. education.
c. income.
d. race.
Answer:
Commercial Wholesale, Inc., conducts its operations unethically, which, when revealed,
will likely affect its
a. good will only.
b. profits only.
c. reputation only.
d. good will, profits, and reputation.
Answer:
A law that prohibits or inhibits only some persons from exercising a fundamental right
will be subject to ‘strict scrutiny’ by the courts.
Answer:
Some countries provide insurance for their citizens’ investments abroad.
Answer:
Title VII of the Civil Rights Act of 1964 prohibits only intentional discrimination.
Answer:
A buyer’s failure to cover will bar him or her from using any other remedies available
under the UCC.
Answer:
An acceptance can impose new conditions or change the terms of the original offer
without rejecting it.
Answer:
Merchants are held to a higher standard of performance or duty than are nonmerchants.
Answer: