Business Law quiz answers Test 1

The study of business law does not involve an ethical dimension.
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Terms in this set (120)
The study of business law does not involve an ethical dimension.
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False
A constitution is a primary source of law.
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True
Even if it conflicts with the U.S. Constitution, a state constitution is supreme within that states' borders.
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False
The U.S. Constitution is the basis of all law in the United States.
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True
A local ordinance commonly has to do with a matter concerning only a local governing unit.
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True
Congress or a state legislature establishes an administrative agency to perform a specific function.
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True
Rules issued by administrative agencies affect almost every aspect of a business's operations.
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True
The doctrines and principles announced in court decisions govern all areas not covered by statutory or administrative law.
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True
The common law is a body of law developed from judicial decisions.
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True
The basis of a civil law system is a written code of laws.
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True
Power, Inc., is a corporation engaged in the business of producing, refining, and distributing energy resources. With respect to the firm's managers, legal concepts can be useful for Power's a. all of the choices. b. marketing manager. c. human resources manager. d. accounting and finance manager.a. all of these choicesLaws enacted by legislative bodies at any level of government make up the body of law generally referred to asstatutory lawOn a challenge to a provision in a state constitution that conflicts with a provision in the U.S. Constitutionthe state provision will not be enforcedThe Florida legislature enacts a state law that violates the U.S. Constitution. This law can be enforced byno oneAdministrative law includesthe rules, orders, and decisions of a government agency.Common law rules develop fromprinciples underlying judges' decisions in actual controversies.Stare decisis is best defined asa doctrine under which judges follow established precedentsA precedent isa court decision that furnishes an example for deciding subsequent cases involving similar or identical facts or principlesIn Peyton v. Quality Motors, a state supreme court held that a minor could cancel a contract for the sale of a car. Now a trial court in the same state is deciding Rikki v. Street Deals, Inc., a case with similar facts. Under the doctrine of stare decisis, the trial court is likely toallow the minor to cancel the contractAn award of damages isa payment of money or propertyThe national government has the implied power to undertake actions necessary to carry out its expressly designated powers. T/FTrueLocal governments, including cities, exercise police powers. T/FTrueUnder the full faith and credit clause, any judicial decision in one state with respect to contract rights will be honored and enforced in all states. T/FTrueThe system of checks and balances in the U.S. Constitution allows each branch of government to limit the actions of the other branches. T/FTrueState governments do not have any authority to regulate interstate commerce. T/FFalseThe first ten amendments to the U.S. Constitution are commonly known as the Bill of Rights. T/FTrueCorporations enjoy many of the same rights and privileges as natural persons do. T/FTrueThe rights secured by the Bill of Rights are absolute. T/FFalseEqual protection means that the government must treat all individuals the same. T/FFalsePrivacy rights receive no protection under federal law. T/FFalseA federal form of government is one in which the national government shares sovereign power withthe statesThe term checks and balances refers to the system under whichthe powers of government are divided among its branches, each of which exercises a check on the actions of the others.The federal government has the power to regulate commercial activities among the states underthe commerce clauseUnder the U.S. Constitution, Congress has the power to regulateevery commercial enterprise in the United StatesFederal regulations concerning medical devices directly conflict with a certain state law. Under the U.S. Constitution, which law takes precedence is determined bythe supremacy clauseThe Bill of Rights embodiesa series of protections for the individual against government actionThe members of Climate Action believe that a recently enacted federal law is unconstitutional. They write and sign a petition to the government to repeal the law, refuse to obey it, and stop others from complying with it. Under the First Amendment, these individuals have a right topetition the governmentUtah enacts a statute to ban advertising in "bad taste." Most likely, a court would hold this statute to bean unconstitutional restriction of speechTo reduce traffic, Market Town enacts an ordinance that allows only a few specific street vendors to operate in certain areas. A court would likely review this ordinance under the principles ofequal protectionJon, a law enforcement official, monitors Kelsey's Internet activities—e-mail and website visits—to gain access to her personal financial data and student information. This may violate Kelsey's right toprivacyConduct that is legal is ethically unquestionable. T/FFalseIt can be difficult to predict with certainty how a court will apply a given law to a particular action. T/FTrueThe study of ethics goes no further than the requirements of the law to evaluate what is right for society. T/FFalseThe effectiveness of an industry code of ethics is partly determined by the commitment of the industry or company leadership to enforce it. T/FTrueOne view of the role of business in society is the perceived duty of a company only to generate revenue for its owners. T/FTrueEthical decision makers should test and reflect on the outcome of their decisions. T/FTrueOne of the most important ways to maintain an ethical workplace is for management to set standards and expectations for ethical behavior. T/FTrueCorporate social responsibility may increase a business's reputation or goodwill. T/FTrueAn overemphasis on long-run profit maximization is a common reason for ethical problems that occur in business. T/FFalseOnce a company has investigated any foreign suppliers, it is unnecessary to continue to monitor those suppliers. T/FFalseBusiness ethics looks at whether business decisionsare right or wrongCloud Source LLC sells to Distribution Inc. a promising idea for a technological innovation that looks promising but that is still being developed. This isethical and legalEthics focuses on how persons making business decisions applymoral principlesBuild-It Inc. applied an inexpensive but untested technique to brace a transit tunnel wall. The technique was legal but the tunnel collapsed, killing several commuters. Build-It's action wasunethical because the technique was untestedThe National Association of Manufacturers (NAM) announces a new industry code of ethics. The effectiveness of this code will be determined bythe commitment of NAM's members to enforcing the codeEthical issues that a business manager is not likely to encounter includeprotocols for company meetings"Be honest and treat people fairly." In regard to business ethics, implementing this motto isimportant in all circumstancesWhen the chief financial officer, or other executive, of a corporation is unsure whether a certain business action is legal, she should acthonestly and responsiblyIf a company strictly complies with existing laws, the firm willfulfill SOME business ethics obligationsAccording to the theory of corporate social responsibility, any decision by corporate management should consider how an action affects the firm'sofficers, shaerholders, suppliers, customers, and communityJudicial review is the process through which Congress approves or rejects judicial appointments. T/FFalseAny court can exercise jurisdiction over any person. T/FFalseUnder a state long-arm statute, a court can exercise jurisdiction only over certain nonresident defendants. T/FTrueThe amount of business a corporation does within a state can serve to subject or exempt the firm from that state's jurisdiction. T/FTrueA federal court will apply federal law in a case involving a federal question. T/FTrueDoing business within a jurisdiction is not enough for most courts to compel a defendant to appear. T/FFalseA corporation's compliance with the laws of any jurisdiction in which it does business is complicated by the fact that those laws can be very different. T/FTrueThe effect of the minimum-contacts standard is that a business firm has to comply with the laws of any jurisdiction in which it targets customers. T/FTrueA question of law is generally the focus of an appellate court. T/FTrueA choice-of-law clause permits a party to choose which nation's law to apply to a dispute arising under an international contract. T/FFalseTwo businesses—Berry Farms LLC and Canned Jams Inc.—dispute the quality of goods delivered by the seller and the price agreed to by the buyer. With regard to this dispute, the two parties can a. litigate it. b. any of the choices. c. resolve it through an alternative method, such as arbitration. d. settle it between themselves.b. any of these choicesA challenge to the constitutionality of an executive order that limits certain state actions iswithin the power of judicial reviewThe 1803 decision of the United States Supreme Court in the case of Marbury v. Madison establishedthe power of the judicial reviewOvid wants to file a suit against Petra. For a court to hear the case,the court must have jurisidictionHobbes, a resident of Illinois, owns a warehouse in Indiana. A dispute arises over the ownership of the warehouse with Jules, a resident of Kentucky. Jules files a suit against Hobbes in Indiana. Regarding this suit, Indiana hasin rem jurisdictionLazlo, a citizen of Minnesota, wants to file a suit against Nadji, a citizen of Ohio. The diversity of citizenship may be a basis fora federal court to exercise jurisdictionSteel Mill Inc. makes steel forms of substandard quality. Tower Building Company has never bought or used a Steel Mill form, but files a suit against the firm, alleging that its products are defective. The defendant's best ground for dismissal of the suit is that the plaintiff does not havestanding to sueA trial court's capacity to directly observe witnesses' gestures, demeanor, and other nonverbal behavior supports the decision of an appellate court todefer to the trail court's findings on questions of factFresh Seafood Inc. and Grocers Market LLC dispute a term in their contract. Because the parties have a long-standing business relationship that they would like to continue, they could settle their dispute through mediation becausethe process is not adversarial as litigationIn a suit to compel arbitration, a court will order a dispute to be arbitrated ifboth parties consented to itFailing to strictly follow the procedural rules and standards for determining disputes in courts is not likely to affect the outcome in a particular case. T/FfalseA complaint contains a brief summary of the facts necessary to show the party filing the complaint is entitled to relief. T/FTrueA default judgment is a judgment entered by a court in a case in which neither party prevails. T/FFalseA request for admission can lengthen a trial because the parties have to take the time to prove facts on which they may already agree. T/FFalseA deposition can be used to impeach a party or witness who changes his or her testimony at trial. T/FTrueVoir dire refers to the jury selection process. T/FTrueTo meet the standard of proof of preponderance of the evidence, a party must prove its case beyond a reasonable doubt. T/FFalseJurors must decide a case based only on the information that they learn during the trial. T/FTrueAn appellate court can modify a trial court's decision, in whole or in part. T/FTrueBefore a lawsuit is initiated, a plaintiff should consider whether the defendant is able to pay the damages sought. T/FTrueCarly files a complaint against Delivery Corporation, charging that she has not been paid and wants to recover the unpaid amount, plus interest. The complaint and a summons will most likely be served onthe corporation's registered agentIhlan initiates a lawsuit against Juno, alleging that Juno has not paid her rent for six months and Ihlan wants her to vacate her apartment. The sheriff serves a summons. Juno does not respond. Ihlanwill be awarded a default judgmentGrain Farm Inc. files a suit against Harvest Services. Before the court can exercise jurisdiction over Harvest, the court must have proof thatHarvest was notified of the suitRadiant Supply wants to initiate a suit against Solar Power LLC by filing a complaint. The complaint should include a statement of the facts necessary to show thatthe plaintiff is legally entitled to a remedy.Sportsfield Inc. files a suit against Tailgate Services. Before the trial, during the jury selection process, Sportsfield's attorney asks, without providing any reason, that one of the potential jurors not be sworn in. This isa peremptory challengeBarge Company and Cove Harbor dispute the meaning of their contract. Unable to agree on settlement, the parties prepare for trial. To obtain information, they engage in discovery. This includes gaining access to each other's witnesses and other types of evidence bydepositions and other devicesRecreation Corporation files a suit against Spring Break Tours Inc. and seeks to examine certain documents in the defendant's possession. A legitimate reason for this examination is that the documents containinformation that is relevant to the caseTo prepare for a trial between Sky Quest Inc. and Telescope Company, the plaintiff's attorney places the defendant's chief executive officer (CEO) under oath. A court official makes a record of the attorney's questions and the CEO's answers. This isa depositionLoni files a civil suit against Meme's Bridal Shop, seeking to recover the amount of a refund for an undelivered wedding dress. To succeed, the plaintiff must prove her caseby a preponderance of the evidenceMarin files a suit against Nagle over payment due on a lease of grazing land. The case proceeds to trial, after which the court renders a verdict. The case is appealed to an appellate court. After its review of Marin v. Nagle, the appellate court upholds the lower court's verdict. The appellate court hasaffirmed the caseAny time one party's allegedly wrongful conduct causes injury to another, an action may arise under the law of torts. T/FTrueA defendant cannot be liable in an intentional tort action if he or she did not intend to cause harm to the plaintiff. T/FFalseIntent can be transferred when an individual intends to harm one individual but unintentionally harms another. T/FTrueAn act intended to make another person fearful of an immediate physical harm is an assault if the threat is reasonably believable. T/FTrueA person who wrongfully hurts another's good name or reputation orally may be liable for libel. T/FFalseA false statement made with actual malice can constitute defamation, unless the statement is about a public figure. T/FfalseA wrongful action that interferes with a person's legal right to personal property can support a tort action in trespass. T/FTrueProximate cause exists if "but for" a wrongful act, an injury would not have occurred. T/FFalseForeseeability is the test for proximate cause. T/FTrueA defendant cannot be liable for negligence unless he or she intended to harm the plaintiff. T/FFalseDylan applies for a position with Electrical Works LLC. Dylan's previous employer, Federal Circuits Inc., gives Electrical Works a review of Dylan that includes negative statements Federal Circuits knows are untrue. This isdefamationPete, a broker, advises Ollie to invest in Rocky Road Inc. When the share price of Rocky's stock decreases, Ollie accuses Pete of fraud, claiming reliance on Pete's advice. The reliance that gives rise to liability for fraud requiresa misrepresentation of fact knowing that it is falseBram knows that the pipes in his building leak, but he tells Cass, a potential buyer, that there are no leaks. On this assurance, Cass buys the building. On learning the truth, she may sue Bram forfraudulent misrepresentationFran tells Gio that her Hyundai Kia has never been in an accident. This may give rise to an action for fraud if the statement is a. false b. opinion c. puffery d. facta. falseBuddy's Burgers advertises so effectively that the regular customers of its competitor Slimy's Sliders patronize Buddy's instead of Slimy's. This is a. none of the choices b. conversion c. wrongful interference with a contractual relationship d. wrongful interference with a business relationshipa. none of the choicesLarry takes Kyla's textbook and hides it so that she cannot find it during the week before the exam. In taking the textbook, Larry most likely committedtrespass to personal propertyFred, a clerk at a Games Store, takes a game player and a selection of games from the store without permission. Most likely, Fred is liable forconversionBix backs out of City Parking Garage, colliding with Dill's car. Dill may recover $7,500 to cover the cost of the repairs if Bix failed to act asa reasonable personCato is driving a car in which Diego is a passenger when an accident occurs. Diego is not injured. In Diego's tort action against Cato for negligence, Cato can most likely assert as a successful defense thatdiego was not injuredGood Samaritan statutes were passed largely to protect, in emergency situations,physicians and medical personnel