Legal Environment Of Business Exam Quiz

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Legal Environment Of Business Exam Quiz - Quiz

Here is the Legal Environment of Business Exam quiz, which is a comprehensive test encompassing various areas of business law. It evaluates students' understanding of contract law, intellectual property, employment law, corporate governance, and ethical business practices.

This quiz prepares future business leaders to make informed decisions, mitigating legal risks in the corporate landscape. It often includes case studies, hypothetical scenarios, and questions on key legal principles and concepts. By engaging with this test, students develop a robust foundation in the legal intricacies that govern businesses, ultimately fostering a more ethically and legally aware business environment.


Questions and Answers
  • 1. 

    After a decision has been rendered in a case, neither party may file an appeal.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    After a decision has been rendered in a case, either party may file an appeal. This means that if one of the parties is dissatisfied with the decision, they have the right to request a higher court to review the case and potentially overturn the decision. Therefore, the statement that neither party may file an appeal after a decision has been made is incorrect.

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  • 2. 

    Mathias and Dunwitty sign a contract. The contract contains a clause that provides if a dispute arises, they will submit the dispute to arbitration. A dispute arises, and Mathias files a suit against Dunwitty. Under normal circumstances, the court would

    • A.

      Refuse to hear the case on the basis that self-help is the sole remedy in such cases

    • B.

      Hear the suit and then compel Mathias to arbitrate

    • C.

      Compel Mathias to arbitrate

    • D.

      Order relief under summary judgment without hearing the suit or compelling Mathias to arbitrate

    Correct Answer
    C. Compel Mathias to arbitrate
    Explanation
    Under normal circumstances, the court would compel Mathias to arbitrate. This is because the contract between Mathias and Dunwitty contains a clause that states any disputes must be submitted to arbitration. This means that the court would enforce the terms of the contract and require Mathias to go through the arbitration process rather than pursuing a lawsuit in court.

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  • 3. 

    To have standing to sue, a party must have been harmed or have been threatened with harm by the action about which he or she complains.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    In order to have standing to sue, a party must demonstrate that they have suffered harm or have been threatened with harm as a result of the action they are complaining about. This means that they must have a direct and personal interest in the case, rather than just a general concern about the issue. Without this harm or threat of harm, the party does not have the legal right to bring a lawsuit. Therefore, the statement that the answer is true is correct.

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  • 4. 

    Cyberspace is its own jurisdiction.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The statement "Cyberspace is its own jurisdiction" is false. Cyberspace is not a separate jurisdiction but rather a virtual space where online activities take place. Jurisdiction refers to the authority of a particular government or legal system to enforce laws and regulations within a specific geographic area. In cyberspace, different jurisdictions may apply depending on the location of the individuals or entities involved in the online activity. Therefore, cyberspace is subject to the laws and regulations of the jurisdictions where the involved parties are located.

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  • 5. 

    Lulu files a suit against Carl Jr. before going to trial, the parties meet, with thier attorneys present to represent them, to try to resolve their dispute without the involvement of a third party. This is--

    • A.

      Arbitration

    • B.

      Litigation

    • C.

      Mediation

    • D.

      Negotiation

    • E.

      Not possible

    Correct Answer
    D. Negotiation
    Explanation
    In this scenario, the parties are meeting with their attorneys to try to resolve their dispute without involving a third party. This process is known as negotiation, where the parties engage in discussions and make offers or compromises in order to reach a mutually acceptable solution. Arbitration involves a third party making a binding decision, litigation refers to the process of resolving disputes through the court system, and mediation involves a neutral third party facilitating the negotiation process. Since the parties are attempting to resolve the dispute themselves without involving a third party, negotiation is the correct answer.

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  • 6. 

    Carl files a suit against Dina over a contract between them. Before the trial begins, Carl can obtain from Dina--

    • A.

      Access to related documents in Dina's possession

    • B.

      Accurate information about Dina's privileged material

    • C.

      An admission of the truth of matters not related to the trial

    • D.

      All of the above

    Correct Answer
    A. Access to related documents in Dina's possession
    Explanation
    Before the trial begins, Carl can obtain access to related documents in Dina's possession. This means that Carl has the right to request and review any documents that are relevant to the contract dispute between him and Dina. This allows Carl to gather evidence and information that may support his case or help him understand the details of the contract better. By having access to these documents, Carl can be better prepared for the trial and make informed decisions regarding his legal strategy.

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  • 7. 

    A motion for summary judgment may be supported with sworn statements and other materials.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    A motion for summary judgment can indeed be supported with sworn statements and other materials. This is because a motion for summary judgment is a request made by one party in a lawsuit to the court, asking the court to rule in their favor based on the evidence and legal arguments presented, without the need for a trial. Sworn statements, also known as affidavits, are written statements made under oath, and they can be used as evidence to support the motion. Other materials, such as documents, records, or expert reports, can also be submitted to further strengthen the motion for summary judgment.

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  • 8. 

    An arbitrator's mistake in a finding of fact or a conclusion of law is the only basis for setting aside an award.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    An arbitrator's mistake in a finding of fact or a conclusion of law is not the only basis for setting aside an award. There are other grounds for setting aside an award, such as if the arbitrator acted in bad faith, exceeded their authority, or if there was a violation of due process. Therefore, the given statement is false.

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  • 9. 

    For purposes of diversity of citizenship, a corporation is a citizen only of the state in which it is incorporated.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    A corporation is not only a citizen of the state in which it is incorporated for purposes of diversity of citizenship. In addition to the state of incorporation, a corporation can also be considered a citizen of the state(s) where it has its principal place of business. This is known as the "nerve center" test, where the state(s) where the corporation's high-level management and decision-making activities take place are considered its principal place of business. Therefore, a corporation can be a citizen of multiple states for diversity of citizenship purposes.

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  • 10. 

    An arbitrator can never render a legally binding decision.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    An arbitrator can render a legally binding decision. Arbitration is a form of alternative dispute resolution where parties agree to have their dispute resolved by a neutral third party, the arbitrator. The decision made by the arbitrator is binding and enforceable, similar to a court judgment. This allows the parties to avoid the formal court process while still obtaining a legally binding resolution to their dispute. Therefore, the statement that an arbitrator can never render a legally binding decision is false.

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  • 11. 

    A long-arm stature is a state law that permits courts to obtain jurisdiction over out-of-state defendants.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    A long-arm statute is a law that allows courts to exercise jurisdiction over individuals or entities who are not physically present within the state but have sufficient minimum contacts with the state. This means that even if the defendant is located outside of the state, the court can still assert jurisdiction over them if they have conducted business or committed a legal wrong within the state. Therefore, the statement that a long-arm statute permits courts to obtain jurisdiction over out-of-state defendants is true.

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  • 12. 

    Doug files a suit in Ohio against Beth over the ownership of a boat docked in Ohio. Doug and Beth are residents of New York. Beth could ask for a change of venue on the ground that New York

    • A.

      Has a sufficient stake in the matter

    • B.

      Has jurisdiction

    • C.

      Has sufficient minimum contacts with the parties

    • D.

      Is a more convenient location to hold the trial

    Correct Answer
    D. Is a more convenient location to hold the trial
    Explanation
    Beth could ask for a change of venue on the ground that New York is a more convenient location to hold the trial. This means that Beth believes it would be more practical and efficient to have the trial take place in New York, rather than in Ohio where the boat is docked. This could be due to factors such as the location of witnesses, availability of legal resources, or logistical considerations.

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  • 13. 

    Hermoine and Marvin have a long-standing relationship that they would prefer to maintain, even though they are currently divided over how best to resolve a dispute concerning a delivery of grain. To minimize the possibility that this dispute will undermine their relationship, Hermione and Marvin should probably hire the services of

    • A.

      A negotiator

    • B.

      A mediator

    • C.

      An arbitrator

    • D.

      An enforcer

    • E.

      A finagler

    Correct Answer
    B. A mediator
    Explanation
    Hermione and Marvin want to maintain their long-standing relationship despite their disagreement over the delivery of grain. Hiring a negotiator may not be the best option as it could lead to further conflict. An arbitrator, who makes a binding decision, might create a winner-loser situation which could strain their relationship. An enforcer would enforce a decision, which could be seen as unfair. A finagler, someone who manipulates or deceives, would not be suitable. Therefore, hiring a mediator would be the best choice as they can help facilitate communication, find common ground, and assist in reaching a mutually agreeable solution, thus minimizing the risk of damaging their relationship.

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  • 14. 

    The courts act as a check on the other branches of government

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement is true because the courts play a crucial role in ensuring that the other branches of government, namely the executive and legislative branches, do not exceed their constitutional authority. Through judicial review, the courts have the power to interpret and apply the law, and they can declare actions or laws passed by the other branches as unconstitutional. This power acts as a check on the potential abuse of power by the executive and legislative branches, ensuring that they operate within the bounds of the law and the Constitution.

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  • 15. 

    Carol files a suit against Delta Hog Trap Corporation. Delta responds that it appears from the pleadings the parties do not dispute the facts and the only question is how the law applies to those facts. Delta supports this response with witnesses' sworn statements. This is --

    • A.

      A counterclaim

    • B.

      A motion for judgment on the pleadings

    • C.

      A motion for summary judgment

    • D.

      A motion to dismiss

    • E.

      A motion in limine

    Correct Answer
    C. A motion for summary judgment
    Explanation
    A motion for summary judgment is the correct answer because Delta is asserting that there are no genuine disputes of material fact and that they are entitled to judgment as a matter of law based solely on the pleadings and witnesses' sworn statements. This motion is typically filed when the parties agree on the facts but disagree on how the law should be applied. It allows the court to decide the case without the need for a trial if there are no genuine issues of material fact in dispute.

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  • 16. 

    State courts are independent of federal courts.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    State courts are independent of federal courts because the United States has a dual court system, meaning that there are separate state and federal court systems. State courts handle cases that involve state laws, such as criminal offenses or civil disputes within a specific state's jurisdiction. On the other hand, federal courts handle cases that involve federal laws, constitutional issues, or disputes between states. The independence of state courts from federal courts allows each system to operate and make decisions based on their respective laws and jurisdictions.

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  • 17. 

    The US Supreme Court has appellate authority over all cases decided in the state courts.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The US Supreme Court does not have appellate authority over all cases decided in the state courts. The Supreme Court is the highest court in the United States and primarily has appellate jurisdiction over cases that involve federal law or constitutional issues. State courts have their own separate judicial systems and their decisions are generally final, unless there is a federal question involved that can be appealed to the Supreme Court. Therefore, the statement is false.

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  • 18. 

    Sam files a suit against Tina. If this suit is like most cases, it will be--

    • A.

      Dismissed before the parties enter a courtroom

    • B.

      Settled before the parties enter a courtroom

    • C.

      Dismissed or settled before the parties enter a courtroom

    • D.

      Resolved only after a trial

    Correct Answer
    C. Dismissed or settled before the parties enter a courtroom
    Explanation
    In most cases, suits like the one Sam filed against Tina are either dismissed or settled before the parties enter a courtroom. This means that the majority of cases are resolved through either a dismissal by the court or a settlement agreement reached between the parties involved, without the need for a trial.

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  • 19. 

    Jan and Kyle sign a contract that provides if a dispute arises, they will submit to arbitration. A dispute arises, but before it goes to arbitration, Jan files a suit against Kyle. The court will likely --

    • A.

      Hear the suit and then order the parties to arbitrate

    • B.

      Hear the suit without ordering the parties to arbitrate

    • C.

      Order relief without hearing the suit or compelling the parties to arbitrate

    • D.

      Order the parties to arbitrate

    Correct Answer
    D. Order the parties to arbitrate
    Explanation
    When Jan and Kyle signed a contract agreeing to submit to arbitration in case of a dispute, they created a legally binding agreement. Therefore, the court is likely to order the parties to arbitrate, as they have already agreed to do so. Filing a suit before arbitration does not invalidate the arbitration clause in the contract. The court's role is to enforce the terms of the contract and ensure that the parties follow the agreed-upon dispute resolution process.

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  • 20. 

    The internet has no effect on a court's assertion of personal jurisdiction.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    The internet can have a significant impact on a court's assertion of personal jurisdiction. With the increasing prevalence of online activities, courts have recognized that engaging in certain activities on the internet can establish sufficient contacts with a particular jurisdiction, thereby allowing the court to assert jurisdiction over the parties involved. This is particularly relevant in cases involving e-commerce, online contracts, or torts committed through online platforms. Therefore, it is incorrect to say that the internet has no effect on a court's assertion of personal jurisdiction.

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  • 21. 

    Holly, a lawyer on the staff of International Roadkill Group, applies the utilitarian theory of ehtics in business contexts. Utilitarianism focuses on

    • A.

      Moral values

    • B.

      Religious beliefs

    • C.

      The consequences of an action

    • D.

      The nature of an action

    • E.

      None of the foregoing

    Correct Answer
    C. The consequences of an action
    Explanation
    Utilitarianism is a moral theory that suggests that the right action is the one that produces the greatest overall happiness or well-being for the greatest number of people. It focuses on the consequences of an action rather than the moral values, religious beliefs, or the nature of the action itself. Therefore, Holly, as a lawyer applying the utilitarian theory of ethics, would prioritize considering the consequences of her actions in business contexts to maximize the overall well-being of the people affected by those actions.

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  • 22. 

    Ethical standards based on religious teachings involve an element of compassion.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Ethical standards based on religious teachings often emphasize the importance of compassion. Many religious traditions teach their followers to treat others with kindness, empathy, and understanding. Compassion is seen as a fundamental aspect of moral behavior, as it involves caring for and showing concern for the well-being of others. Therefore, it is true that ethical standards based on religious teachings involve an element of compassion.

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  • 23. 

    In business negtiations, Beth, the CEO of Design Outhouses, Inc., follows "The Golden Rule," which

    • A.

      Encourages the accumulation of as much personal wealth as possible

    • B.

      Mandates compassionate treatment of others in all situations

    • C.

      Permits taking advantage of others in financial terms

    • D.

      Requires an increase of business profits over a certain period

    Correct Answer
    B. Mandates compassionate treatment of others in all situations
    Explanation
    The correct answer is "mandates compassionate treatment of others in all situations." This means that in business negotiations, Beth believes in treating others with kindness and empathy, regardless of the circumstances. This approach prioritizes the well-being and fair treatment of others over personal gain or taking advantage of others financially. Beth believes in conducting business in a compassionate and ethical manner, ensuring that all parties involved are treated with respect and consideration.

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  • 24. 

    The minimal acceptable standard for ethical behavior is compliance with the law.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The statement suggests that the minimum requirement for ethical behavior is to abide by the law. This means that individuals should not engage in any activities that are illegal or against the established legal framework of a society. While compliance with the law is an important aspect of ethical behavior, it is important to note that ethical behavior goes beyond legal requirements and encompasses principles such as honesty, fairness, and respect for others. However, the statement specifically focuses on the minimal acceptable standard, implying that compliance with the law is the bare minimum for ethical behavior.

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  • 25. 

    To assist in detecting illegal bribes, Eagles & Buzzards Expediters, Inc., and all U.S. companies, must --

    • A.

      Conceal financial records that reveal past bribes

    • B.

      Keep records that "accurately and fairly" reflect financial activities

    • C.

      Make bribes through third parties rather than directly to officials

    • D.

      Permit payments to foreign officials that are unlawful in that country

    • E.

      Maximize profits however and whenever possible

    Correct Answer
    B. Keep records that "accurately and fairly" reflect financial activities
    Explanation
    The correct answer is to keep records that "accurately and fairly" reflect financial activities. This is because maintaining accurate and fair financial records is essential for detecting illegal bribes. By keeping such records, companies can ensure transparency and accountability in their financial activities, making it easier to identify any suspicious transactions or bribes that may have taken place.

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  • 26. 

    Ignorance of the law will always excuse a business from liability for a violation of that law.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Ignorance of the law does not excuse a business from liability for a violation of that law. Businesses are expected to be aware of and comply with the laws and regulations that apply to their operations. Ignorance of the law is not a valid defense and does not absolve a business from any legal consequences or liability for breaking the law. Therefore, the statement is false.

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  • 27. 

    Ethics focuses on the way in which moral principles apply in daily life.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Ethics is a branch of philosophy that deals with moral principles and how they guide human behavior. It is concerned with understanding what is right and wrong and how these principles apply to various situations in our daily lives. Therefore, the statement that ethics focuses on the way in which moral principles apply in daily life is accurate and true.

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  • 28. 

    Jill lies to her family. According to legal and ethical principles, this is --

    • A.

      Illegal

    • B.

      Unethical

    • C.

      Illegal and unethical

    • D.

      None of the above

    Correct Answer
    B. Unethical
    Explanation
    Jill's action of lying to her family is considered unethical. This is because lying goes against moral principles and values, such as honesty and trustworthiness. It is generally believed that individuals should be truthful in their interactions with others, especially their own family members. Lying can lead to a breakdown in relationships and can cause harm or distress to those who are deceived. Therefore, based on legal and ethical principles, Jill's behavior is considered unethical.

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  • 29. 

    According to utilitarianism, it does not matter how many people benefit from an act.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Utilitarianism is an ethical theory that focuses on maximizing overall happiness or well-being. According to utilitarianism, the moral worth of an action is determined by its consequences and the amount of happiness it produces for the greatest number of people. Therefore, it does matter how many people benefit from an act in utilitarianism. The correct answer is False.

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  • 30. 

    For Antonio, as the manager of a division of Panther Pass Powdered Brew Co., ethics is not concerned with --

    • A.

      Acting in Panther's best interest

    • B.

      Antonio's personal convictions

    • C.

      Practical concern for public opinion

    • D.

      Public perception of profit-making activities

    • E.

      All of the above

    Correct Answer
    B. Antonio's personal convictions
    Explanation
    As the manager of a division of Panther Pass Powdered Brew Co., Antonio's ethics should not be based solely on his personal convictions. Instead, ethics should be focused on acting in Panther's best interest, considering practical concerns for public opinion, and being mindful of the public perception of profit-making activities. Therefore, Antonio's personal convictions should not be the sole determinant of his ethical decisions as a manager.

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  • 31. 

    A background in business ethics is not as important as knowledge of specific laws.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    This statement is false because while knowledge of specific laws is important, having a background in business ethics is also crucial. Business ethics helps individuals understand the moral and ethical implications of their actions in the business world, ensuring that they make decisions that are not only legal but also morally acceptable. Without a foundation in business ethics, individuals may inadvertently engage in unethical behavior even if they are knowledgeable about specific laws. Therefore, both knowledge of specific laws and a background in business ethics are important for individuals in the business world.

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  • 32. 

    An action may be legal but not ethical.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    This statement suggests that just because an action is legal, it does not necessarily mean that it is ethical. Legal actions are those that are permitted or allowed by law, while ethical actions are those that align with moral principles and values. It is possible for an action to be within the boundaries of the law but still be considered unethical due to its potential harm, unfairness, or violation of moral standards. Thus, the statement is true as legality and ethics are distinct concepts.

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  • 33. 

    Discharging only one employee for ethical reasons has no impact on others' unethical behavior in the workplace.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    Discharging only one employee for ethical reasons does have an impact on others' unethical behavior in the workplace. When one employee is held accountable and faced with consequences for their unethical actions, it sends a message to other employees that such behavior will not be tolerated. This can serve as a deterrent and encourage others to reconsider their own unethical actions. Additionally, it can create a culture of accountability and integrity within the workplace, where employees understand that their actions have consequences.

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  • 34. 

    Setting realistic workplace goals can reduce the probability that employees will act unethically.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Setting realistic workplace goals can reduce the probability that employees will act unethically because when employees have achievable goals, they are more likely to feel motivated and satisfied. This can lead to higher job performance and a sense of fulfillment, reducing the temptation to engage in unethical behavior. On the other hand, unrealistic goals can create pressure and stress, which may push employees to resort to unethical means to meet those goals. Therefore, setting realistic goals promotes a positive work environment and encourages ethical behavior.

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  • 35. 

    Acme Possum Soup Company manages its employees' retirement benefit plan. With respect to this plan, Acme has

    • A.

      A fiduciary duty

    • B.

      A subsidiary duty

    • C.

      A prolitarian duty

    • D.

      No duty

    • E.

      A proletarian duty

    Correct Answer
    A. A fiduciary duty
    Explanation
    Acme Possum Soup Company has a fiduciary duty towards its employees' retirement benefit plan. This means that the company is legally obligated to act in the best interests of the plan participants and beneficiaries. As a fiduciary, Acme must exercise care, loyalty, and prudence when managing the plan's assets and making decisions. This duty ensures that the company acts responsibly and ethically, prioritizing the financial well-being of its employees and retirees.

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  • 36. 

    Mary Neil, a supervisor for Panther Pass Powdered Brew Co., attempts to apply the "Golden Rule" in her job. This rule

    • A.

      Encourages people to accumulate as much wealth as they can

    • B.

      Has been adopted by most religions

    • C.

      Is the cornerstone of modern ethical study

    • D.

      Permits one to respond in kind to those who engage in unethical behavior

    • E.

      Requires a balance of the cost-benefit analysis

    Correct Answer
    B. Has been adopted by most religions
    Explanation
    The "Golden Rule" is a principle that is found in many religions and ethical systems. It encourages individuals to treat others as they would like to be treated themselves. This principle promotes empathy, kindness, and fairness in human interactions. Its adoption by most religions suggests its universal appeal and recognition of its moral value.

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  • 37. 

    Steve, the HR director for Total Zero Corporation, attempts to comply with the law in dealing with applicants and employees. One of hte challenges Steve faces is that the legality of an action is

    • A.

      Always clear

    • B.

      Never clear

    • C.

      Sometimes clear

    • D.

      Usually clear

    • E.

      Abstractly deductible

    Correct Answer
    C. Sometimes clear
    Explanation
    Steve, the HR director, tries to follow the law when dealing with applicants and employees. However, he faces challenges because the legality of an action is not always clear. This means that there are situations where it is evident whether an action is legal or not, but there are also instances where it is unclear. Therefore, Steve has to navigate through these situations and seek guidance to ensure compliance with the law.

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  • 38. 

    Corporate decisions affect only those who own, operate, or work for the company.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    This statement is false because corporate decisions can have a wide range of impacts beyond just the owners, operators, and employees of a company. Corporate decisions can affect customers, suppliers, competitors, and even the broader community or society in which the company operates. For example, a company's decision to engage in unethical practices can harm consumers or the environment. Additionally, corporate decisions can have economic implications that extend beyond the company itself, such as affecting local or national economies.

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  • 39. 

    Global Buzzard Bait Corporation, like other businesses, has duties prescribed by

    • A.

      Ethics only

    • B.

      The law only

    • C.

      Ethics and the law

    • D.

      None of the above

    Correct Answer
    C. Ethics and the law
    Explanation
    Global Buzzard Bait Corporation, like any other business, is bound by both ethics and the law. Ethics refers to the moral principles and values that guide business conduct, ensuring fair and responsible behavior towards stakeholders. The law, on the other hand, consists of legal regulations and obligations that businesses must adhere to, such as environmental regulations, labor laws, and consumer protection laws. By following both ethics and the law, Global Buzzard Bait Corporation can maintain a positive reputation, build trust with stakeholders, and avoid legal consequences.

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  • 40. 

    Corporations owe legal duties to their shareholders and their employees.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    Corporations owe legal duties to their shareholders and employees because they have a fiduciary responsibility to act in the best interests of both parties. Shareholders entrust their investment in the corporation with the expectation of receiving a return, and employees rely on the corporation for fair treatment and compensation. Therefore, corporations are legally obligated to prioritize the interests of their shareholders and employees to ensure their rights and well-being are protected.

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  • 41. 

    Septimus files suti against the federal government to block the enforcement of a new tax law. Septimus claims that Congress attempted to regulate indirectly, by taxation, an area over which it has no authority. If the court agrees, it will

    • A.

      Invalidate the tax if it bears a reasonable relationship to revenue

    • B.

      Invalidate the tax if it was found to have been enacted as a surreptitious method to raise taxes

    • C.

      Invalidate the tax without considering its relationship to revenue

    • D.

      Validate the tax if it bears a reasonable relationship to revenue production

    • E.

      Validate the tax without considering its realtionship to revenue production

    Correct Answer
    D. Validate the tax if it bears a reasonable relationship to revenue production
    Explanation
    If the court agrees with Septimus' claim that Congress attempted to regulate an area over which it has no authority through taxation, it would validate the tax if it bears a reasonable relationship to revenue production. This means that if the tax is primarily intended to generate revenue for the government and is not a surreptitious method to raise taxes or regulate an area outside of Congress' authority, the court would consider it valid. The court would not invalidate the tax solely based on its relationship to revenue, but rather consider the intent behind its enactment.

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  • 42. 

    State police powers relate solely to criminal law enforcement.

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    State police powers do not solely relate to criminal law enforcement. State police agencies are responsible for a wide range of duties, including enforcing traffic laws, responding to emergencies, conducting investigations, and providing assistance to local law enforcement agencies. They also have the authority to enforce state laws and regulations, maintain public order, and ensure public safety. Therefore, state police powers extend beyond just criminal law enforcement.

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  • 43. 

    A law that limits the liberty of all  persons to do something may violate

    • A.

      Equal protection

    • B.

      Procedural due process

    • C.

      Substantive due process

    • D.

      None of the above

    Correct Answer
    C. Substantive due process
    Explanation
    Substantive due process refers to the principle that certain rights are fundamental and cannot be infringed upon by the government, even if there is a valid reason or procedure in place. Therefore, a law that limits the liberty of all persons to do something may violate substantive due process because it would infringe upon their fundamental rights. This means that the government cannot pass laws that unreasonably restrict the rights and freedoms of individuals without a compelling reason.

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  • 44. 

    A law that restricts a fundamental right violates substantive due process unless it promotes a compelling or overriding state interest.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    This statement is true because according to the concept of substantive due process, a law that restricts a fundamental right must have a compelling or overriding state interest in order to be considered constitutional. This means that the government must have a strong reason to limit a person's fundamental rights, such as protecting public safety or national security. Without a compelling state interest, the law would be seen as an infringement on individual liberties and a violation of due process.

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  • 45. 

    Mike, an advocate of a certain religion, publishes an article in New Times magazine insisting that Congress base all federal law on his religion's principles. The First Amendment guarantees Mike's freedom of

    • A.

      Religion only

    • B.

      Speech only

    • C.

      The press only

    • D.

      Religion, speech, and the press

    Correct Answer
    D. Religion, speech, and the press
    Explanation
    The First Amendment guarantees Mike's freedom of religion, speech, and the press. This means that Mike has the right to practice his religion, express his beliefs through speech, and publish his ideas in the press. The First Amendment protects these fundamental rights and ensures that individuals have the freedom to express their religious beliefs, speak their minds, and share their ideas with others through various mediums such as newspapers, magazines, and online platforms.

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  • 46. 

    The First Amendment does not protect obscene speech.

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    The First Amendment of the United States Constitution guarantees the right to freedom of speech. However, this right is not absolute and does not protect obscene speech. Obscene speech is defined as material that appeals to prurient interests, depicts sexual conduct in an offensive way, and lacks serious artistic, scientific, or political value. The Supreme Court has established that obscenity is not protected by the First Amendment and can be regulated or prohibited by the government. Therefore, the statement that the First Amendment does not protect obscene speech is true.

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  • 47. 

    The Constitution sets out the authority and the limits of the branches of the government. The term checks and balances means that

    • A.

      Congress authorizes expenditures of funds and the president balances the budget

    • B.

      Each branch of the government has some power to limit the actions of the other branches

    • C.

      Each branch of the government may exercise the quthority of the other branches

    • D.

      The president "check" with the courts, which "balance" the effect of the laws

    • E.

      None of the above

    Correct Answer
    B. Each branch of the government has some power to limit the actions of the other branches
    Explanation
    The term "checks and balances" refers to the system in which each branch of the government has the authority to limit the actions of the other branches. This means that no single branch can become too powerful or abuse its power. It ensures a separation of powers and prevents any one branch from becoming dominant over the others. This system helps to maintain a balance of power and protect against tyranny.

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  • 48. 

    A Metro City ordinance allows only a few street vendors to operate in certain areas, for the purpose of reducing traffic. A court would likely hold this ordinance to be

    • A.

      Constitutional under the due process clause

    • B.

      Constitutional under the equal protection clause

    • C.

      Unconstitutional under the due process clause

    • D.

      Unconstitutional under the equal protection clause

    Correct Answer
    B. Constitutional under the equal protection clause
    Explanation
    The court would likely hold this ordinance to be constitutional under the equal protection clause because it allows only a few street vendors to operate in certain areas, which can be seen as a reasonable classification based on the purpose of reducing traffic. The equal protection clause requires that the government treat similarly situated individuals or groups in a similar manner, and in this case, the ordinance treats all street vendors equally by limiting their numbers in specific areas. Therefore, the court would likely find that the ordinance does not violate the equal protection clause.

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  • 49. 

    The requirement that no person be deprived of "life, liberty, or property without due process of law" is found in

    • A.

      The First Amendment only

    • B.

      The Fifth Amendment only

    • C.

      The Fourteenth Amendment only

    • D.

      The Fifth Amendment and the Fourteenth Amendment

    Correct Answer
    D. The Fifth Amendment and the Fourteenth Amendment
    Explanation
    The requirement that no person be deprived of "life, liberty, or property without due process of law" is found in the Fifth Amendment and the Fourteenth Amendment. The Fifth Amendment applies to the federal government and provides this protection, while the Fourteenth Amendment applies to the states and extends this protection to individuals at the state level as well. Both amendments ensure that individuals are entitled to a fair legal process before being deprived of their rights or property.

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  • 50. 

    The Lizard Lick Chamber of Commerce would like to see a law enacted to require cats to be on a leash and not allowed to run loose in the community. Under the Constitution making laws is the function of

    • A.

      The executive branch of the government

    • B.

      The judicial branch of the government

    • C.

      The legislative branch of the government

    • D.

      None of the above

    Correct Answer
    C. The legislative branch of the government
    Explanation
    The legislative branch of the government is responsible for making laws. This branch consists of the Congress, which includes the Senate and the House of Representatives. They have the authority to propose, debate, and pass laws that govern various aspects of society, including regulations for pets like cats. The executive branch, on the other hand, is responsible for enforcing laws, while the judicial branch interprets and applies laws. Therefore, the legislative branch is the correct answer in this case.

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Quiz Review Timeline +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Jul 13, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Sep 17, 2012
    Quiz Created by
    Starekm23
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