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1) firms that acquire monopoly power in a given market comply with the antitrust laws
objective of promoting competitive market structures.
2) a corporations sale of substantially all of the assets of the business must be approved
by its shareholders.
3) the proof of joint action required for violations of 1 is applicable when a single firm
is guilty of monopolizing or attempting to monopolize a part of trade or commerce.
4) greater contacts are needed to subject a corporation to property taxation in a state
than are needed to subject it to state income and sales taxation.
5) the ucc provides that a lawsuit for breach of a sales contract must be filed within a
year after the breach occurs.
6) uniform acts are model statutes drafted by private bodies of lawyers and/or scholars;
they become law only after legislature enacts them.
7) government action that discriminates on the basis of illegitimacy receives full strict
scrutiny.
8) generally speaking, the uccs rules for the definiteness of an offer make it easier to
form a contract than traditional common law rules.
9) eminent domain:
a.allows the government to acquire private property for public use.
b.allows a private citizen to sue his neighbors for nuisance.
c.instructs private citizens to ensure reasonable security of their premises.
d.prohibits discrimination in housing on the basis of race or disabilities.
10) provided that most of the directors of a corporation are independent, if shareholders
bring a derivative action against the directors, the burden of proving that bringing the
action is in the best interest of the corporation lies on the:
a.company secretary.
b.secretary of state.
c.board of directors.
d.shareholders.
11) king sent foster, a real estate developer, a signed offer to sell a specified parcel of
land to foster for $200,000. king, an engineer, had inherited the land. foster telephoned
king the same day that he received his letter and accepted the offer. which of the
following statements concerning the contract is correct under the statute of frauds?
a.no contract was formed because foster did not sign the offer.
b.no contract was formed because king is not a merchant.
c.a contract was formed, although it would be enforceable only against king.
d.a contract was formed but it is unenforceable.
12) in order for a purchaser of land to avoid a contract with the seller based on duress, it
must be shown that the sellers improper threats:
a.were due to his relationship with the purchaser.
b.actually induced the purchaser to assent to the contract.
c.were due to his position of dominance with the purchaser.
d.influenced the purchaser to assent as there were no reasonable alternatives.
13) all the gas stations in smalltown agree to charge the same price for gas. the owners
of the various companies get together every friday in a coffee shop to decide what the
price will be next week. this is:
a.a violation of the sherman act, section 1.
b.a violation of the mccarran-ferguson act.
c.a violation of the robinson-patman act.
d.not a violation, as long as it benefits consumers.
14) anna wants to create a will indicating that her favorite grandchild, jesse, will inherit
her house. anna takes an ordinary sheet of paper and, in her own handwriting, states that
it is her intent to leave her house to jesse when she dies. she dates and signs the will, but
there are no witnesses to it. anna then tells her entire family about the will. anna lives in
a state where holographic wills are recognized, but nuncupative wills are not. will annas
will be recognized and followed?
a.yes, because annas will is entirely in her handwriting.
b.no, because there were no witnesses present when anna made her will.
c.no, because a will must always be witnessed.
d.yes, because annas will has been already disclosed.
15) _____ is the plaintiffs voluntary consent to a known danger.
a.contributory negligence
b.assumption of risk
c.comparative negligence
d.negligence per se
16) why were equitable remedies developed?
a.common law rules were too flexible to produce fair results.
b.the remedies available in common law courts were too few.
c.equitable remedies were rigid rules of law and produced fair results.
d.common law rules were less technical and rigid.
17) which of the following would keep the truth in lending act from applying to a
transaction?
a.the intent of the debtor to make commercial use of funds borrowed in the transaction.
b.the transaction being an open-end credit plan.
c.the debtor being a natural person rather than a business entity.
d.the creditor being a credit card issuer rather than a maker of a conventional loan.
18) what does present intent to contract mean?
a.intent to enter the contract upon acceptance
b.intent to negotiate in case of rejection of offer
c.intent to set contractual conditions
d.intent to engage more than one partner in the deal
19) harris is a purchasing agent for elkin, a sole proprietor. harris has the express
authority to place purchase orders with elkins suppliers. harris typically conducts
business through the mail and has very little contact with elkin. elkin was incapacitated
by a stroke and was declared incompetent in a judicial proceeding. subsequently, harris
placed an order with ajax, inc. on behalf of elkin. neither ajax nor harris were aware of
elkins incapacity. with regard to the contract with ajax, elkin (or elkins legal
representative) will:
a.not be liable because harris was without authority to enter into the contract.
b.not be liable provided that harris had placed orders with ajax in the past.
c.be liable because harris was acting within the scope of harris authority.
d.be liable because ajax was unaware of elkins incapacity.
20) predatory co., a large company entering a new geographic market, decided to
eliminate its smaller rivals in the new market by selling below cost in that market (but
not elsewhere) until the rivals were forced out of business. this type of price
discrimination is classified as:
a.super-tertiary level discrimination.
b.tertiary level discrimination.
c.primary level discrimination.
d.secondary level discrimination.
21) the private securities litigation reform act of 1995 requires an auditor to:
a.report to the securities and exchange commission a clients illegal act that has a
material impact on the financial statements of the client when the client has failed to
take remedial action.
b.resign from an audit engagement when the client commits an illegal act that has a
material impact on the financial statements of the client and the client has failed to take
remedial action.
c.inform a clients shareholders of the clients illegal act that has a material impact on the
financial statements of the client when the client has failed to take remedial action.
d.force a client to disclose to its shareholders and to the securities and exchange
commission a clients illegal act that has a material impact on the financial statements of
the client when the client has failed to take remedial action.
22) ace computers (ac) is a manufacturer. it entered into a contract with a retailer,
reliable computer (rc) for the sale of 100 new xyz model computers at $1,000 each, for
delivery in 6 months. ac would thus make a profit of $50,000. six months later however,
the xyz model has become almost relatively obsolete; its market price is only $600 at
that time. rc refuses to accept or pay for those computers. if ac sues, how much should
it be entitled to in damages? (ignore any incidental expenses or cost savings to ac.)
a.nothing; when the xyz model became almost obsolete, this excused rc from the
contract.
b.$50,000, the profit ac would have made had rc not breached the contract.
c.$40,000, the difference between market price and contract price.
d.$90,000, the lost profit plus the difference between market price and contract price.
23) which of the following actions is considered to reflect a counteroffer?
a.a grumbling acceptance
b.an inquiry regarding terms
c.a demand for additional terms
d.a silent acceptance
24) sisk is a tenant of met co. and has two years remaining on a six-year lease executed
by sisk and met. the lease prohibits subletting but is silent as to sisks right to assign the
lease. sisk assigns the lease to kern corp. which assumes all of sisks obligations under
the lease. met objects to the assignment. which of the following statements is correct?
a.the assignment to kern is voidable at mets option.
b.sisk would have been relieved from liability on the lease with met if sisk obtained
mets consent to the assignment.
c.sisk will remain liable to met for the rent provided for in the lease.
d.with respect to the rent provided for in the lease, kern is liable to sisk but not to met.
25) the relinquishment of rights by a party in a contract is called a(n) _____.
a.waiver
b.rescission
c.impossibility
d.reliance interest
26) advertisements for the sale of goods at specific prices are considered to be:
a.bids.
b.unenforceable contracts.
c.invitations to offer.
d.unilateral contracts.
27) a deed where the grantor warrants against (and agrees to defend against) title
defects and encumbrances that arose after she acquired the property is called:
a.a special warranty deed.
b.a quitclaim deed.
c.a general warranty deed.
d.an invalid deed.
