Business Law: Principles for Today's Commerical Environment: Principles Volume 3rd Edition Test Bank

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Chapter 1—THE NATURE AND SOURCES OF LAWTRUE/FALSE1.The pattern of rules that society uses to control the conduct of individuals in their relationships iscalled law.ANS:TMSC:AACSB Analytic2.The law works to cause our society to operate in an inefficient manner.ANS:FMSC:AACSB Analytic3.Law is often defined as the body of principles that courts will enforce.ANS:TMSC:AACSB Analytic4.Jane asserts she has a legal right. Jane is really saying she has an obligation to perform or refrain fromperforming an act.ANS:FTOP:MSC:AACSBAnalytic5.Rights always stand alone, without any duties.ANS:FMSC:AACSB Analytic6.Rights guaranteed in the United States Constitution are not accompanied by duties.ANS:FMSC:AACSB Analytic7.Court decisions and statutes can take away rights created by the United States Constitution.ANS:FMSC:AACSB Analytic8.One of our most important rights is the right of privacy.ANS:TMSC:AACSB Analytic9.The right to be secure against unreasonable searches and seizures conducted by the police isguaranteed by state statute.ANS:FMSC:AACSB Analytic10.TheUnited StatesConstitution provides that we have a right to be free from intrusions by others.ANS:TMSC:AACSB Analytic11.The private life of a nonpublic citizen is subject to public scrutiny.ANS:FMSC:AACSB Analytic

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12.One advantage ofour current legal system is that the growth of technology has not created many newlaws.ANS:FMSC:AACSB Analytic13.The right of privacy does not apply to intrusions into our privacy by means of new technology.ANS:FMSC:AACSB Analytic14.Several layers of law are enacted at different levels of government to provide the framework forbusiness and personal rights and duties. At the base of this framework of laws is constitutional law.ANS:TMSC:AACSB Analytic15.A constitution is a body of principles that establishes the structure of a government and therelationship of that government to the people who are governed.ANS:TMSC:AACSB Analytic16.Statutes are the only source of law.ANS:FMSC:AACSB Analytic17.Within each state in theUnited States, only one constitution is in force.ANS:FMSC:AACSB Analytic18.In addition to state legislatures and the United States Congress, all cities, counties, and othergovernmental subdivisions have some power to adopt ordinances within their sphere of operation.ANS:TMSC:AACSB Analytic19.State legislatures, not Congress, enact statutory law.ANS:FMSC:AACSB Analytic20.Administrative regulations are a type of law.ANS:TMSC:AACSB Analytic21.Administrative regulations generally do not have the force of a statute.ANS:FMSC:AACSB Analytic22.Courts can create law.ANS:TMSC:AACSB Analytic23.When a court decides a new question or problem, the decision is called a precedent.ANS:TMSC:AACSB Analytic

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24.The group of time-honored rules that courts have used to solve similar problems for decades is calledstare decisis.ANS:TMSC:AACSB Analytic25.Treaties made by theUnited States are not deemed part of the law.ANS:FMSC:AACSB Analytic26.UniformState Law generally is not applicable to business.ANS:FMSC:AACSB Analytic27.Those uniform state laws that have been adopted by individual states were first written by Congress.ANS:FMSC:AACSB Analytic28.Substantive law creates rights and duties.ANS:TMSC:AACSB Analytic29.Law may be classified in terms of principles of law and principles of equity.ANS:TMSC:AACSB Analytic30.In theUnited States today, we generally have one law court and one equity court.ANS:FMSC:AACSB AnalyticMULTIPLE CHOICE1.Law is:a.a body of religious principles held by all members of society.b.a body of principles that society establishes to keep things running smoothly.c.always the result of case-law decisions.d.derived solely from the United States Constitution.ANS:BMSC:AACSB Analytic2.Law consists of:a.principles that govern conduct.b.mere guidelines.c.arbitrary rules.d.none of the above.ANS:ATOP:MSC:AACSB Analytic3.The law couldbestbe described as:a.only statutory in nature.b.only the creation of our courts.c.a multitude of rightsand corresponding duties.d.none of the above.ANS:CMSC:AACSB Analytic

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4.Our rights flow from:a.the Constitution.b.federal statutes.c.city ordinances.d.all of the above.ANS:DMSC:AACSB Analytic5.A right can exist:a.by itself.b.only if created by a court.c.only if there is a corresponding duty.d.only under local law.ANS:CMSC:AACSB Analytic6.A right is defined as:a.an obligation.b.a legal capacity to require another party to perform.c.any written promise.d.none of the above.ANS:BMSC:AACSB Analytic7.Individual rights guaranteed in the United States Constitution:a.have no accompanying duties.b.apply only to a small number of individuals.c.are subject to state legislative laws.d.generally have accompanying duties.ANS:DMSC:AACSB Analytic8.Rights guaranteed in the United States Constitution:a.cannot be taken away by statutes or court decisions.b.can be taken away by statutes.c.can be taken away by court decisions.d.can be taken away by local ordinances.ANS:AMSC:AACSB Analytic9.The right of privacy consists of:a.the right to be secure against unreasonable searches by the government only.b.the right to protection against intrusions by others only.c.both the right to be secure against unreasonable searches by the government and the rightto protection against intrusions by others.d.none of the above.ANS:CMSC:AACSB Analytic10.Sheriff Jane desires to search your home. What law requires that the sheriff obtain a search warrant?a.the Fourth Amendment of theUnited States Constitutionb.the Equal Protection Clausec.state statuted.local uniform police ordinances

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ANS:AMSC:AACSB Analytic11.The right to privacy applies to protect you from unreasonable searches:a.to you personally.b.to your home.c.to your business.d.all of the above.ANS:DMSC:AACSB Analytic12.Your private life is protected from intrusions by other people by:a.the Fourth Amendment of theUnited States Constitution.b.the Equal Protection Clause.c.court decisions of the United States Supreme Court.d.local ordinance.ANS:CMSC:AACSB Analytic13.Interpretations of aspects of the right to privacy are often found in:a.statutes.b.customs.c.societal guidelines.d.none of the above.ANS:AMSC:AACSB Analytic14.Technology:a.has not created situations that require the application of new rules of law.b.has indeed created situations that require the application of new rules of law.c.has done away with the right of privacy.d.has made it easier to identify when one's privacy has been invaded.ANS:BMSC:AACSB Analytic15.Several layers of law are enacted at different levels of government to provide the framework forbusiness and personal rights and duties. At the base of this framework of laws is/are:a.statutory law.b.case law.c.constitutional law.d.all of the above.ANS:CMSC:AACSB Analytic16.Sources of American law include:a.state constitutions.b.statutes enacted by state legislatures.c.court decisions.d.all of the above.ANS:DMSC:AACSB Analytic17.____ is a body of principles that establishes the structure of a government and the relationship of thatgovernment to the people.a.A constitutionb.State statutec.Stare decisis

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d.The common lawANS:AMSC:AACSB Analytic18.Statutory law is created by:a.Congress.b.state legislatures.c.local governments.d.all of the above.ANS:DMSC:AACSB Analytic19.Administrative regulations:a.are essentially industry advisories.b.are case-law precedents.c.have the force of statute.d.are Constitutional principles.ANS:CMSC:AACSB Analytic20.Legal principles expressed for the first time in court decisions are called:a.statutory law.b.stare decisis.c.common law.d.precedent.ANS:DMSC:AACSB Analytic21.Statutes which are drafted from Uniform State Laws are often used to regulate:a.business.b.foreign countries.c.criminal behavior.d.none of the above.ANS:AMSC:AACSB Analytic22.UniformStateLaws are used as a basis for laws by which of the following entities?a.Congressb.international trade associationsc.state legislaturesd.local governmental entitiesANS:CMSC:AACSB Analytic23.Substantive law:a.specifies the steps to follow to enforce legal rights.b.concerns equitable relief only.c.creates, defines, and regulates rights and duties.d.draws solely on English legal principles.ANS:CMSC:AACSB Analytic24.Laws can be classified in terms of:a.Roman and English law.b.substantive and procedural law.c.law and equity.

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d.all of the above.ANS:DMSC:AACSB AnalyticCASE1.Jacob just won the state lottery. Discuss his right to privacy.ANS:Within the context of the Fourth Amendment, Jacob continues to be protected to the same extent hewas prior to winning. Regarding his right to be protected from intrusions by others,however, he mostlikely will have to give up some privacy rights because of his good fortune; that is, although heremains a private citizen, he will not have quite the same degree of privacy protection in this arena ashe had before winning the lottery.MSC:AACSB Reflective Thinking | AACSB Analytic2.A new state law mandates that all employers must prohibit smoking onemployerpremises. The lawfurther provides that any employer who allows anemployeeor a client/ customer to smokeon itspremisesissubject to a court order requiring the employer to enforce the law. Describe this statute interms of all possible classification methods.ANS:The lawissubstantive because it definesrights and liabilities of business owners.The lawisalsoequitable,based onthe remedy ofspecific performance, since it subjects the employer to a court orderrequiring the employer to actually do something; i.e., forbid smoking on its premises.MSC:AACSB Reflective Thinking | AACSB Analytic

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Chapter 2—THE COURT SYSTEM AND DISPUTE RESOLUTIONTRUE/FALSE1.The power of a court to decide certain types of cases is calledjurisdiction.ANS:TMSC:AACSB Analytic2.All courts have original jurisdiction.ANS:FMSC:AACSB Analytic3.A court with limited jurisdiction can only hear certain types of cases.ANS:TMSC:AACSB Analytic4.Reversible errors are commonly made by supreme courts.ANS:FMSC:AACSB Analytic5.The federal court system consists of three levels.ANS:TMSC:AACSB Analytic6.All federal courts are expressly created by the United States Constitution.ANS:FMSC:AACSB Analytic7.TheUnited States Supreme Court can never function as a court of original jurisdiction.ANS:FMSC:AACSB Analytic8.A probate court is an example of a general trial court.ANS:FMSC:AACSB Analytic9.A family law court is an example of a specialty court.ANS:TMSC:AACSB Analytic10.State supreme courts generally hear all cases appealed to them.ANS:FMSC:AACSB Analytic11.The defendant in a civil case is the party who is suing.ANS:FMSC:AACSB Analytic12.To begin a lawsuit, both parties must appear in person and state their claims and defenses in court.ANS:FMSC:AACSB Analytic

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13.If questions of fact are involved, the court will decide the case based on the pleadings alone.ANS:FMSC:AACSB Analytic14.Documents filed by both parties at the beginning of a lawsuit are called thepleadings.ANS:TMSC:AACSB Analytic15.Depositions are usually taken in the courtroom.ANS:FMSC:AACSB Analytic16.A peremptory challenge to a prospective juror generally can be exercised without giving a reason.ANS:TMSC:AACSB Analytic17.A motion for a directed verdict occurs immediately after the last pleading is filed.ANS:FMSC:AACSB Analytic18.Once a lawsuit is commenced, the case must go to the jury.ANS:FMSC:AACSB Analytic19.Generally, the prevailing party in a lawsuit will be awarded the costs of the action, including witnessfees and jury fees.ANS:TMSC:AACSB Analytic20.Garnishment is a procedure accomplished only by attorneys.ANS:FMSC:AACSB Analytic21.Mediation is a generally accepted method of resolving disputes.ANS:TMSC:AACSB Analytic22.Arbitration procedures occur in a court of law.ANS:FMSC:AACSB Analytic23.The Uniform Arbitration Act requires a written agreement to arbitrate an issue.ANS:TMSC:AACSB Analytic24.When arbitration is mandatory under a statute, the losing party generally can appeal from sucharbitration to a court.ANS:TMSC:AACSB Analytic25.A mediator has the power to actually make a decision in a dispute.ANS:FMSC:AACSB Analytic

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26.Mediation tends to keep discussions between parties proceeding.ANS:TMSC:AACSB Analytic27.If there is a reference to a third party to determine a dispute, most often the loser is not allowed toappeal the third party's decision.ANS:TMSC:AACSB Analytic28.A "rent-a-judge" serves as a referee.ANS:TMSC:AACSB Analytic29.A person who hears summary jury trials is called anombudsman.ANS:FMSC:AACSB Analytic30.The Seventh Amendment to the United States Constitution provides for a federal ombudsman.ANS:FMSC:AACSB AnalyticMULTIPLE CHOICE1.A court is a tribunal established by:a.the parties to a lawsuit.b.the government.c.the parties to a contract.d.none of the above.ANS:BMSC:AACSB Analytic2.The power given to courts to hear certain types of cases is called:a.jurisdiction.b.mediation.c.arbitration.d.summary judgment.ANS:AMSC:AACSB Analytic3.Original jurisdiction courts are generally what type of courts?a.supreme courtsb.appellate courtsc.trial courtsd.limited courtsANS:CMSC:AACSB Analytic4.An example of limited or special jurisdiction courts would include:a.probate courts.b.juvenile courts.c.equity courts.d.all of the above.

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ANS:DMSC:AACSB Analytic5.The federal court system consists of ____ level(s) of courts.a.oneb.twoc.threed.fourANS:CMSC:AACSB Analytic6.The types of civil cases that can be brought in federal district courtsinclude:a.the probate of an estate.b.cases between citizens of different statesthat involve damages of $75,000 or more.c.cases brought by the citizen of one state against the state government of the same state.d.none of the above.ANS:BMSC:AACSB Analytic7.TheUnited States Supreme Court was created by:a.Congress.b.the President.c.theUniformStateLaw Commission.d.none of the above.ANS:DMSC:AACSB Analytic8.State supreme courts primarily have what type of jurisdiction?a.appellateb.limited trial courtc.generald.none of the aboveANS:AMSC:AACSB Analytic9.The person who initiates a lawsuit is called the:a.defendant.b.moving party.c.plaintiff.d.none of the above.ANS:CMSC:AACSB Analytic10."Service of process" refers to:a.a demand letter sent by the plaintiff to the defendant.b.a reply sent to the plaintiff by the defendant.c.giving the defendant proper notice that a legal action is pending.d.a record of the court's preliminary hearing.ANS:CMSC:AACSB Analytic11.The answer to the complaint is filed by the:a.defendant.b.moving party.c.plaintiff.d.none of the above.

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ANS:AMSC:AACSB Analytic12.A motion to dismiss a lawsuit on the basis that, even if everything in the complaint were true, theplaintiffwould not be entitled to relief is called amotion:a.to compelb.to dismissc.for summary judgmentd.none of the aboveANS:BMSC:AACSB Analytic13.Who isentitled to file a motion to dismiss?a.defendant onlyb.plaintiff onlyc.both plaintiff and defendantd.none of the aboveANS:AMSC:AACSB Analytic14.A deposition:a.is the testimony of a witness taken under oath.b.is conducted outside of the courtroom.c.can be used to impeach a witness.d.all of the above.ANS:DMSC:AACSB Analytic15.Voir dire examination is used in connection with:a.determining whether the pleadings are valid.b.jury selection.c.deciding whether to appeal a trial court decision.d.none of the above.ANS:BMSC:AACSB Analytic16.The _____ rule(s) on the admissibility of evidence.a.judgeb.juryc.attorneysd.court clerkANS:AMSC:AACSB Analytic17.A motion for a directed verdict is appropriate:a.immediately after the pleadings are filed.b.immediately after discovery is concluded.c.immediately afterthepresentation of all evidence at trial.d.on appeal.ANS:CMSC:AACSB Analytic18.One of the motions that can be made after a verdict has been entered is a motion for a:a.voluntary nonsuit.b.compulsory nonsuit.c.directed verdict.d.judgmentnotwithstanding the verdict.

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ANS:DMSC:AACSB Analytic19.Costs generally are awarded to the prevailing partyin litigation. Those costs usually include:a.filingfees.b.service-of-processfees.c.deposition transcript costs.d.allof the above.ANS:DMSC:AACSB Analytic20.Garnishment applies tothe judgment debtor’s:a.wages.b.attorney fees.c.land and home.d.cars.ANS:AMSC:AACSB Analytic21.Which is not considered an alternate means of dispute resolution?a.civil lawsuitb.arbitrationc.association tribunalsd.minitrialANS:AMSC:AACSB Analytic22.In mediation, the mediator actsasa:a.judge.b.attorney.c.messenger.d.expert witness.ANS:CMSC:AACSB Analytic23.A summary jury trial is:a.binding on the parties.b.a mock trial.c.a full and complete hearing of all evidencepertaining to the case.d.a shortcut to establishingjudicialprecedent.ANS:BMSC:AACSB Analytic24.In a minitrial:a.only three jurors are used.b.the trial addresses onlyportions of the caseor certain issuesrelated tothe case.c.the decision is always fully binding on the parties.d.none of the above.ANS:BMSC:AACSB Analytic25.An ombudsman:a.is usually a government official.b.is often appointed by a judge.c.receives a large amount of judicial power.d.none of the above.

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ANS:AMSC:AACSB AnalyticCASE1.Chandra sues Martin for breach of contract. Both parties have completed discovery. Chandra nowwants her attorney to file a motion to have the judge rule in her favor without having to proceedfurther. Chandra does not know whether the motion to dismiss or the motion for a summary judgmentis proper. Which motion is proper and why?ANS:As between the motion to dismiss and the motion for summary judgment, Chandra’s attorney shouldfile a motion for summary judgment, since the parties are beyond the pleadings stage of litigation, andsince they have completed discovery. Using evidence gathered during discovery, such as affidavitsand/or deposition testimony, Chandra’s attorney could argue that there are no material issues of factdisputed by the parties, and that Chandra is entitled to judgment as a matter of law.MSC:AACSB Reflective Thinking | AACSB Analytic2.Billy has a dispute withSleepdigitBedspring Company overa number ofbedsBilly recentlypurchased fromSleepdigitfor use in his hotel. Billy needs to decide whether to pursue litigation oremploy an alternativemeans ofdispute resolution. What advantages aremost oftenassociated withalternative dispute resolution? Which choice would be most appropriate in this case?ANS:Themost frequently citedadvantagesof alternative dispute resolution, compared to litigation,area)cost savings and b) time savings.As far as a specific method of alternative dispute resolution,arbitration might be the best approachfor Billy in his commercial dispute with Sleepdigit; in additionto the cost-saving and time-saving advantages of alternative dispute resolution,arbitration hasa longhistory of success in theareaof commercial contracts.MSC:AACSB Reflective Thinking | AACSB Analytic

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Chapter 3—BUSINESS ETHICS, SOCIAL FORCES, AND THE LAWTRUE/FALSE1.Ethics is a philosophical concept that deals with values related to the nature of human conduct.ANS:TMSC:AACSB Analytic2.The field of business ethics recognizes that social values typically must yield to the profitabilitymotive.ANS:FMSC:AACSB Analytic3.Moral standards based on positive law may allow businesses to conduct themselves unfairly so long astheir actions are not illegal.ANS:TMSC:AACSB Analytic4.Civil disobedience is the remedy natural law proponents use to change positive law.ANS:TMSC:AACSB Analytic5.Situational ethics is a moral system whose rigidity makes it unnecessary to examine motivation behindconduct in order to label it right or wrong.ANS:FMSC:AACSB Analytic6.In applying the stakeholder model of business ethics, only the interests of important constituenciesaffected by an action need to be satisfied.ANS:FMSC:AACSB Analytic7.There is often a conflict between the goal of making money for shareholders and the goal of solvingsocial problems through business.ANS:TMSC:AACSB Analytic8.In addition to issues of social responsibility, business values and ethics play an important role in thesuccess or failure of a business.ANS:TMSC:AACSB Analytic9.Trust is a fundamental basis of the capitalist system that is central to the expectations of investors,customers, and other firm stakeholders.ANS:TMSC:AACSB Analytic10.Ethical conduct is desirable but not necessary; businessshouldbeconducted through sole relianceonpositive law and its enforcement in the courts.ANS:FMSC:AACSB Analytic

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