1. The obligation owed by individuals to one another not to cause any unreasonable harm or any risk of harm is called:
duty of care
duty of restoration.
duty of loyalty.
duty of restitution.
2. Which of the following best describes the term warranty?
It refers to the terms in a sales contract stipulating the party that will bear the risk of loss of goods during shipment.
It is a purchaser’s title to goods obtained by the impersonation of another person.
It is the seller’s assurance to a buyer that the goods sold meet certain standards of quality.
It refers to the transfer of possession of stolen property to a person who had bought the property without the knowledge that it has been stolen.
3. The manifestation of the substance of a contract by two or more individuals is called ______.
4. Workers’ compensation is defined as the:
set of programs mandated by the government to ensure safety in places of work.
remuneration awarded to employees and their families when the employees are injured on the job.
insurance obtained by employees from private insurance companies and government-sponsored programs.
system that provides retirement and death benefits to covered employees and their dependents.
5. Which of the following applies to trade restraints that are inherently anticompetitive?
The per se rule
The pro rata rule
The rule of four
The rule of reason
6. A group boycott occurs when:
competitors at one level of distribution collectively refuse to deal with others at a different level of distribution.
parties enter into a trade agreement that has greater anticompetitive effects than procompetitive effects.
competitors agree that they will distribute their goods to only a particular portion of the market.
parties at different levels of distribution enter into an agreement to adhere to a schedule that will stabilize prices.
7. Which of the following scenarios is an example of law and ethics contradicting each other?
the trademarked garment designs of a well-known fashion designer.
A restaurateur, whose restaurant is violating labor laws, bribes a federal official to prevent him from reporting the violations.
A florist in the United States employs an illegal immigrant to help the immigrant and her family overcome their financial difficulties.
An iron-ore manufacturing company provides its employees with high-quality safety equipment.
8. Corporate officers are elected by a corporation’s __________.
board of directors
9. Which of the following is a category of torts?
10. Corporate officers are best described as:
owners of a corporation with limited liability for its debts and obligations.
directors elected by a corporation’s shareholders.
employees appointed to manage the daily operations of a corporation.
partners pursuing a joint venture transaction
11. Which of the following is a remedy that requires the breaching party to perform the acts promised in a contract?
12. Helen buys a toy railway set for her 3-year-old son, Ben. The product’s cover mentions that the toy is suitable for children only aged between 3 and 12. While playing with the toy one evening, without Helen’s supervision, Ben chokes on an inch-long engine driver figure that forms part of the train. Although he survives, he is traumatized by the incident. For which type of defect can Helen sue the toy manufacturer?
Failure to tamperproof
Defect in product packaging
Failure to warn
Defect in manufacture
13. An agency that appears to be created by a principal but does not exist in reality is called a(n) ________.
fully disclosed agency
agency by ratification
Robert orders coffee while having breakfast in a diner. He suffers third-degree burn injuries when the coffee accidently spills on him. He presses charges against the diner for failing to notify him that the coffee was exceptionally hot. In this scenario, the diner is guilty of a(n) __________.
15. When an employer does not discriminate against women in general but treats women above the age of 40 differently, the employer is practicing __________.
16. Insider trading is considered illegal because:
it results in excessive losses for the company.
it makes use of nonmaterial public information.
it fails to account for the short-swing profits brought into a company.
it limits investment opportunities for the investing public.
17. When can an arbitrator’s decision and award be appealed to the courts?
When an arbitration is binding
While entering a negotiation
While drafting a submission agreement
When an arbitration is nonbinding
18. When one party acquires a license to use another party’s business model and intellectual property in the distribution of goods and services, the arrangement is a __________.
limited liability partnership
19. Which of the following is a difference between embezzlement and larceny?
Embezzlement is an unintentional tort, whereas larceny is a nonintent crime.
Embezzlement is usually punishable by the payment of monetary damages, whereas larceny is usually punishable by the death penalty.
Embezzlement is the stealing of property by a person to whom the property was entrusted, whereas larceny is the stealing of property by a person not entrusted with it.
Embezzlement is the snatching of personal property from a person’s home, whereas larceny is the snatching of personal property from a person on the street.
20. Which of the following is a criticism of the ethical fundamentalism theory?
It does not allow people to decide for themselves what is right and what is wrong.
It is impossible in the real world to expect that everyone in society will obey moral rules.
It does not reach an agreement on what the universal rules should be.
It is impossible to measure the “good” that may result from different actions.
21. Which of the following is a characteristic of torts?
They are usually not tried by the jury.
They are brought to court by a plaintiff.
They are punishable by the death penalty.
They are tried by criminal procedure.
22. A goal of the Sarbanes-Oxley Act of 2002 is to:
control and closely monitor the financial accounts of all corporations in the United States.
allow directors and executive officers of public companies to be given personal loans from the companies.
end conflicts of interest, establishing better corporate governance.
enable smooth settlement of alleged fraud among major corporations.
23. Laws that prohibit discrimination based on race, gender, or religion in the workplace primarily serve the function of:
minimizing the freedom of employees.
providing a basis for compromise.
advocating social justice.
creating a new status quo.
24. Which of the following is a requirement for obtaining a patent for an invention?
The invention must be in the form of a service.
The invention must be original.
The invention needs to be made of highly valuable components.
The invention needs to be recognizable to the general public.
25. The power and authority to exclude competition or control prices is known as __________.
26. Which of the following is an advantage of franchising?
It allows businesses to reach profitable new markets.
It enables two businesses to pool their resources to pursue a common goal.
It allows a business to consist of only general partnRoberers.
It grants free access to the intellectual property of a business to anyone in the same market.
27. Laws that protect governments from being overthrown primarily serve the function of:
minimizing individual freedom.
advocating social justice
providing bases for compromise.
maintaining the status quo.
28. Which of the following is prohibited by the Food, Drug, and Cosmetic Act (FDCA) with regard to food?
The sale of non-organic food products
Labeling of raw seafood products
Labeling of genetically engineered food products
The sale of adulterated food
29. Which of the following is a difference between arbitration and mediation?
The decision of an arbitrator is nonbinding, whereas the decision of a mediator is binding.
The role of an arbitrator is merely to assist parties in reaching a settlement, whereas the role of a mediator is similar to the role of a trial judge.
An arbitrator is authorized to issue an award, whereas a mediator can only assist in reaching a settlement.
Arbitration is an informal method of dispute resolution, whereas mediation is a formal method of dispute resolution.
30. Ken owns a small convenience store in a street corner in California. One afternoon, a teenage boy enters his store, looks around, and prepares to walk out without buying anything. Ken is wary of the boy because of the boy’s shabby clothing. He stops and asks the boy to empty his pockets and then questions him for about five minutes. After finding that the boy does not have anything from the store on him, Ken reluctantly lets him go. Which of the following is a merchant protection statute that Ken has violated?
Reasonable grounds for suspicion
Adequate assurance of performance
Reasonable duration of detention