- Description
LAW 531T Week 2 Practice Assignment
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Week 2 Practice Assignment
- True or false: Some small businesses may issue stocks to employees instead of compensation when money is tight.
True False
- Which of the following is not true of corporations?
o Executives are not subject to the same duty of care in carrying out the corporation’s purposes as the board of directors.
o The board of directors hires executives of a corporation.
o Directors will not be subject to lawsuit from shareholders as long as they act in a reasonable and prudent way.
o Executives carry out the day-to-day operations of the corporation.
- True or false: In a franchise agreement, the franchisor and the franchisee are separate legal entities.
True False
- Which of the following is not true of general partnerships?
o Partners have an equal right to engage in the management of the business.
o Partners must always agree to split the profits and losses evenly.
o Partners share profits and losses according to the partnership agreement.
o Partners have joint ownership of business assets.
- Corporations created to assist doctors, lawyers, accountants, and so on are known as _________________ corporations.
o not-for-profit
o closely held
o alien
o professional
- True or false: Profits and losses from an LLC must be distributed in the same proportion to all members.
True False
- Which of the following is true of general and limited partners in a limited partnership?
o General and limited partners are jointly responsible for partnership debt.
o Limited partners are not liable for partnership debts.
o General partners are not liable for partnership debts.
o General partners are required to invest capital and refrain from managing the business.
- Which of the following is not true of a business operating under sole proprietorship?
o A sole proprietor pays only personal taxes.
o A sole proprietorship is considered a separate legal entity.
o If the owner dies, the business usually dies as well.
o No government approval is required to set up a sole proprietorship.
- An administrative agency is prohibited from doing all but which of the following?
o extending beyond its authority
o making arbitrary laws
o violating judicial decisions
o exercising legislative power
- Which of the following is true of administrative agencies?
o All administrative agencies answer directly to the president.
o Administrative agencies may overrule judicial decisions.
o An existing administrative agency may not create a new law.
o Each state and local government has administrative agencies.
- _________________ establishes the protocol that must be followed by an administrative agency while enforcing a(n) _________________.
o Substantive law; procedural law
o Interpretive law; substantive law
o Procedural law; substantive law
o Substantive law; interpretive law
- True or false: Production cost may be used as a defense against a company accused of price discrimination.
True False
- The act of controlling prices for goods and services is known as _________________.
o dividing markets
o controlling output
o regulating competitive practices
o price fixing
- An agreement to refuse to deal with another business is known as a _________________.
o boycott
o split
o control
o division
- Which of the following is not a prerequisite to be considered a failing company prior to entering a merger?
o No other buyer is available to rescue the company.
o Too much competition exists in a particular geographical area.
o There is no other reasonable alternative.
o Its assets would evaporate but for a merger.
- Which of the following is a legitimate defense against a claim of exercise of monopoly power?
o The business acquired the monopoly innocently as an unintended consequence of another purpose.
o The business owns 75 percent of the product market.
o The business owns 25 percent of the geographical market.
o The business engaged in a tying arrangement with another business.
- One business having almost all of one product type or service within a geographical area is known as _________________ power.
o horizontal
o monopoly
o consolidated
o vertical
- True or false: The calculation of monopoly power rests squarely on a firm’s percentage of dominance in the relevant market.
True False
- The U.S. Supreme Court has developed two tests for determining the lawfulness of an agreement: the per se rule and the _________________.
o rule of reason
o rule of competition
o rule of trust
o rule of law
- In a(n) _________________, the distributor requires the purchaser of another product to buy another associated product.
o exclusive dealing agreement
o tying arrangement
o geographic allocation agreement
o price maintenance agreement