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Econ

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Chapter 1

Introduction to Law and

1. The stability and predictability created by the law is essential to business activities.

ANSWER: t PAGE: 2 type: =

2. Law is a body of enforceable rules governing relationships among individuals and between individuals and their society.

ANSWER: T PAGE: 2 TYPE: =

3. The natural law philosopher believes that formal law is inferior to universal moral and ethical principles that are part of human nature.

ANSWER: T PAGE: 3 TYPE: =

4. Constitutional law includes only the U.S. Constitution.

ANSWER: F PAGE: 6 TYPE: =

5. A state law that conflicts with the U.S. Constitution will be deemed unconstitutional.

ANSWER: T PAGE: 6 TYPE: =
6. To determine whether a law is constitutional, a court will only look at the law’s source.

ANSWER: F PAGE: 6 TYPE: =

7. Uniform laws apply in all states, including those in which the laws have not been adopted.

ANSWER: F PAGE: 6 type: N

8. State constitutions are supreme within their respective borders.

ANSWER: T PAGE: 6 type: N

9. Statutory law does not include county ordinances.

ANSWER: F PAGE: 6 TYPE: =

10. Every state has adopted the Uniform Commercial Code in its entirety.

ANSWER: F PAGE: 7 TYPE: N

11. Common law is a term for law that is common throughout the world.

ANSWER: F PAGE: 8 TYPE: =

12. Damages is the normal remedy at law today.

ANSWER: T PAGE: 8 TYPE: =

13. Equitable remedies include injunctions and decrees of specific performance.

ANSWER: T PAGE: 8 TYPE: =

14. In most states, a court cannot grant a legal remedy and an equitable remedy in the same case.

ANSWER: F PAGE: 9 TYPE: +

15. Judges use precedent when deciding a case in a common law legal system.

ANSWER: T PAGE: 10 TYPE: =

16. Courts do not depart from precedents.

ANSWER: F PAGE: 10 TYPE: =
17. How the courts interpret a statute determines how that statute is applied.

ANSWER: T PAGE: 13 TYPE: =

18. Criminal law focuses on duties that exist between persons.

ANSWER: F PAGE: 14 type: =

19. A reference to “9 U.S.C. Section 4” means that a statute can be found on page 9 of section 4 of the United States Code.

ANSWER: F PAGE: 15 TYPE: =

20. Most state trial court decisions are not published.

ANSWER: T PAGE: 16 TYPE: +

multiple choice questions

1. Alan is a judge. The function of Alan and other judges is to

a. decide cases on the basis of their opinions about the issues. b. decide cases on the basis of their personal philosophical views. c. interpret and apply the laws. d. make the laws.

ANSWER: C PAGE: 2 type: N

2. Voters in North Carolina approve a new state constitution, after which the Ocean City Council passes new ordinances, the North Carolina Department of Parks and Recreation issues new rules, and the Ocean City Chamber of Commerce sends out new instructions. Sources of law do not include

a. ordinances passed by the Ocean City Council.
b. instructions issued by the Ocean City Chamber of Commerce.
c. rules issued by the North Carolina Department of Parks and Recreation.
d. state constitutions passed by popular vote.

ANSWER: B PAGE: 6 type: +

3. In Nebraska, the superior (highest-ranking) law is

a. a case decided by the Nebraska Supreme Court.
b. a provision in the Nebraska constitution.
c. a rule created by a Nebraska state administrative agency.
d. a statute enacted by the Nebraska legislature.

ANSWER: B PAGE: 6 TYPE: =

4. Hawaii enacts a state law that violates the U.S. Constitution. This law can be enforced by

a. no one. b. the federal government only. c. the state of Hawaii only. d. the United States Supreme Court only.

ANSWER: A PAGE: 6 type: +

5. The Federal Trade Commission is a government agency that issues rules, orders, and decisions. The Georgia state legislature enacts statutes. The Jackson County Board and the Peach City Council enacts ordinances. Administrative law includes which of the following?

a. All law that affects a business’s operation.
b. The rules, orders, and decisions of the Federal Trade Commission.
c. Statutes enacted by the Georgia state legislature.
d. Ordinances created by the Jackson County Board and the city council of Peach City, Georgia.

ANSWER: B PAGE: 7 type: +

6. In a suit against Kate, Lyle obtains specific performance. This is

a. an equitable remedy and a remedy at law. b. an equitable remedy only. c. a remedy at law only. d. neither an equitable remedy nor a remedy at law.

ANSWER: B PAGE: 8 type: +

7. As a judge, Jay applies common law rules. These rules develop from

a. decisions of the courts in legal disputes.
b. regulations issued by administrative agencies.
c. statutes enacted by Congress and the state legislatures.
d. uniform laws drafted by legal scholars.

ANSWER: A PAGE: 8 type: +
8 The federal government and the state governments constitute the U.S. legal system. This system is based on the legal system of

a. Ancient Greece.
b. Ancient Rome.
c. England.
d. France.

ANSWER: C PAGE: 8 type: +

9. In a suit against Adam, Beth obtains a remedy, which is the means given to a party

a. neither to recover a right nor to redress a wrong. b. only to recover a right. c. only to redress a wrong. d. to recover a right or to redress a wrong.

ANSWER: D PAGE: 8 type: =

10. Holly is a state court judge. Ilsa appears in a case in Holly’s court, claiming that Jim breached a contract. As in most state courts, Holly may

a. award damages, cancel a contract, or direct a party to do or not to do an act.
b. award damages only.
c. cancel a contract only.
d. direct a party to do or not to do a particular act only.

ANSWER: A PAGE: 9 type: +

11. In a suit against Charles, Donna obtains the cancellation of a contractual obligation, which is

a. a remedy at law. b. rescission. c. restitution. d. specific performance.

ANSWER: B PAGE: 9 type: =

12. Net Corporation files a suit against Omega, Inc., alleging that Omega breached a contract to sell Net a computer system for $100,000. Net is

a. the appellant.
b. the appellee.
c. the defendant.
d. the plaintiff.

ANSWER: D PAGE: 9 TYPE: N

13. In Abel v. Baker, 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 Charles v. Delta, a case with similar facts. Under the doctrine of stare decisis, the trial court is likely to

a. allow the minor to cancel the contract. b. disregard the previous case.
c. order the minor to cancel the contract. d. require the minor to fulfill the contract.

ANSWER: a PAGE: 10 type: =

14. In Export Co. v. Imports, Inc., there is no precedent on which the court can base a decision. The court can consider, among other things,

a. neither public policy nor social values.
b. public policy only.
c. public policy or social values.
d. social values only.

ANSWER: C PAGE: 10 type: +

15. Kurt is a judge hearing the case of Local Co. v. Macro Corp. Applying the relevant rule of law to the facts of the case requires Kurt to find previously decided cases that, in relation to the case under consideration, are

a. as different as possible.
b. as similar as possible.
c. at odds.
d. exactly identical.

ANSWER: B PAGE: 10 type: =

16. A federal statute regulates an employment practice. To resolve a dispute concerning the practice, Paula, a judge, will most likely apply

a. a common law doctrine that applied before the statute was enacted. b. a common law doctrine that applies to other, different practices. c. Paula’s personal philosophy of law. d. the statute.

ANSWER: D PAGE: 13 type: =

17. The term substantive law refers to laws that

a. create legal rights and obligations.
b. establish the methods of enforcing rights.
c. focus on major, as opposed to minor, issues.
d. prohibit substandard acts.

ANSWER: A PAGE: 14 type: =

18. Beth is a victim of Carl’s violation of a criminal law. Criminal law is concerned with

a. the prosecution of private individuals by other private individuals.
b. the prosecution of public officials by private individuals.
c. the relief available when a person’s rights are violated.
d. wrongs committed against the public as a whole.

ANSWER: D PAGE: 14 type: N

19. The citation of a case does not include

a. the names of the parties. b. the name(s) of the judge(s) who decided it. c. the year in which it was decided. d. the volume and page number of the applicable reporter where the opinion may be found.

ANSWER: B PAGE: 17 type: =

20. The Pennsylvania Supreme Court decides the case of Quality Co. v. Royal Corp. Of nine justices, five believe the judgment should be in Quality’s favor. Justice Smith, one of the five, writes a separate opinion. This opinion is

a. a concurring opinion. b. a dissenting opinion. c. a minority opinion. d. a unanimous opinion.

ANSWER: A PAGE: 23 type: +

Chapter 2

Courts and Alternative
Dispute Resolution

1. Federal courts are superior to state courts.

ANSWER: F PAGE: 30 TYPE: =

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

ANSWER: T PAGE: 30 TYPE: =

3. Generally, a state court can exercise jurisdiction over anyone within the boundaries of the state.

ANSWER: t PAGE: 31 TYPE: =

4. Generally, a state court can exercise jurisdiction over a nonresident by showing that he or she had minimum contacts with the state.

ANSWER: T PAGE: 31 TYPE: =

5. Any lawsuit involving a federal question can originate in a federal court.

ANSWER: T PAGE: 34 TYPE: =

6. Cyberspace is its own jurisdiction.

ANSWER: F PAGE: 34 TYPE: +

7. Doing substantial business in a jurisdiction exclusively over the Internet is never enough to support jurisdiction over a nonresident defendant.

ANSWER: F PAGE: 35 TYPE: +

8. A justifiable controversy is a case in which the court’s decision—the “justice” that will be served—will be controversial.

ANSWER: F PAGE: 37 TYPE: =

9. The decisions of state trial courts of limited jurisdiction may sometimes be appealed to state trial courts of general jurisdiction.

ANSWER: t PAGE: 38 TYPE: +

10. The federal equivalent of a state trial court is a U.S. court of appeals.

ANSWER: F PAGE: 39 TYPE: =

11. The United States Supreme Court has appellate authority over all cases decided in the state courts.

ANSWER: F PAGE: 40 TYPE: =

12. Alternative dispute resolution refers to any method for resolving a dispute outside the court system.

answer: T PAGE: 40 TYPE: N

13. In some courts, pretrial negotiation is mandatory.

answer: T PAGE: 42 TYPE: =

14. Negotiation is the most complex form of alternative dispute resolution.

answer: F PAGE: 42 TYPE: N

15. No court offers mediation as an option before a case goes to trial.

ANSWER: F PAGE: 42 TYPE: +

16. An arbitrator can never render a legally binding decision.

answer: f PAGE: 43 TYPE: N

17. In early neutral case evaluation, a third party’s evaluation of each party’s strengths and weaknesses forms the basis for negotiating a settlement.

ANSWER: t PAGE: 45 TYPE: =

18. Most online dispute resolution (ODR) forums automatically apply the law of the state of California.

answer: f PAGE: 46 TYPE: N

19. Access to online dispute resolution services is possible 24/7.

ANSWER: T PAGE: 47 TYPE: =

20. When a forum-selection or choice-of-law clause is included in an international contract, legal proceedings are more complex and attended by more uncertainty.

ANSWER: F PAGE: 47 TYPE: N

multiple choice questions

1. The Ohio state legislature passes a law to regulate local delivery services. The final authority regarding the constitutionality of this law is

a. the judicial system.
b. the president of the United States.
c. the governor of Ohio.
d. the U.S. Congress.

answer: A PAGE: 30 TYPE: =

2. Leo, a resident of Missouri, owns a warehouse in Nebraska. A dispute arises over the ownership of the warehouse with Opal, a resident of Kansas. Opal files a suit against Leo in Nebraska. Regarding this suit, Nebraska has

a. diversity jurisdiction. b. in personam jurisdiction. c. in rem jurisdiction. d. none of the above.

ANSWER: C PAGE: 31 TYPE: +
3. Ace Company files a suit against Beta, Inc., in a Colorado court with general jurisdiction. Dan files a suit against Eagle, Inc., in a Colorado court with limited jurisdiction. The difference between general and limited jurisdiction is

a. the subject matter of the cases that the court can decide. b. whether a case is being heard for the first time. c. whether a case is brought by a citizen or by a business. d. whether the court is exercising in personam or in rem jurisdiction.

ANSWER: A PAGE: 33 TYPE: +

4. Stan, a citizen of Texas, wants to file a suit against Uma, a citizen of Virginia. Their diversity of citizenship may be a basis for

a. any court to exercise in rem jurisdiction. b. a federal district court to exercise original jurisdiction. c. a U.S. court of appeals to exercise appellate jurisdiction. d. the United States Supreme Court to issue a writ of certiorari.

answer: B PAGE: 34 TYPE: +

5. Lariat Rope Company, a firm based in Montana, advertises on the Web. A court in North Carolina would be most likely to exercise jurisdiction over Lariat if the firm

a. conducted substantial business with North Carolina residents at its Web site.
b. interacted with any North Carolina resident through its Web site.
c. only advertised without interactivity at its Web site.
d. all of the above.

ANSWER: A PAGE: 35 TYPE: +

6. Ann files a suit against Bob in a California state court, noting that Bob operates a Web site through which California residents have done substantial business with him. If the court applies the principles expressed in Case 2.2, Bird v. Parsons, it will likely exercise jurisdiction over Bob

a. if Ann’s claim arises from anything a California resident has done.
b. if Ann’s claim arises from Bob’s Web site activities.
c. if Ann’s claim arises from something other than Bob’s Web site.
d. under no circumstances.

ANSWER: B PAGE: 35 TYPE: N
7. Don files a suit against Eagle Sales, Inc., in a Florida state court based on a Web site through which Florida residents can do business with Eagle. If the court applies the principles expressed in Case 2.2, Bird v. Parsons, it will likely exercise jurisdiction over Eagle if the interactivity of the site is seen as

a. a “neutral” connection with the state.
b. an “Internet” connection with the state.
c. a “passive” connection with the state.
d. a “substantial enough” connection with the state.

ANSWER: D PAGE: 35 TYPE: N

8. Inferior Company sells products that are poorly made. Jack, who has never bought an Inferior product, files a suit against Inferior, alleging that its products are defective. The firm’s best ground for dismissal of the suit is that Jack does not have

a. certiorari.
b. jurisdiction.
c. standing.
d. sufficient minimum contacts.

answer: C PAGE: 37 TYPE: +

9. Mary wins her suit against National Manufacturing Company. National’s best ground for appeal is the trial court’s interpretation of

a. the conduct of the witnesses during the trial.
b. the credibility of the evidence that Mary presented.
c. the dealings between the parties before the suit.
d. the law that applied to the issues in the case.

ANSWER: D PAGE: 39 TYPE: =

10. Ben files a suit in a federal district court against Cathy. Cathy loses the suit, appeals to the U.S. Court of Appeals for the Second Circuit, and loses again. Cathy asks the United States Supreme Court to hear the case. The Court is

a. not required to hear the case.
b. required to hear the case because Cathy lost in a federal court.
c. required to hear the case because Cathy lost in a lower court.
d. required to hear the case because it is an appeal.

answer: A PAGE: 40 TYPE: =

11. Cody wants to appeal his case against Digital Corporation to the United States Supreme Court. Cody must ask the Court to issue a writ of

a. certiorari.
b. jurisdiction.
c. standing.
d. venue.

answer: A PAGE: 40 TYPE: +

12. Edie files a suit against Frank. If this suit is like most cases, it will be

a. dismissed during a trial.
b. dismissed or settled before a trial.
c. resolved only after a trial.
d. settled at a trial.

ANSWER: B PAGE: 42 TYPE: +

13. Sally and Tom disagree over the amount of money due under their contract. To avoid involving any third party in a resolution of the dispute, Sally and Tom might prefer to use the alternative dispute resolution method of

a. arbitration. b. litigation. c. mediation. d. negotiation.

answer: D PAGE: 42 TYPE: N

Fact Pattern 2-1 (Questions 14-16 apply)
Java Cafes, Inc., and Kaffe Import Corporation dispute a term in their contract.

14. Refer to Fact Pattern 2-1. The least expensive method to resolve the dispute between Java and Kaffe may be

a. arbitration because the case will be heard by a mini-jury. b. litigation because each party will pay its own legal fees. c. mediation because the dispute will be resolved by a non-expert. d. negotiation because no third parties are needed.

answer: D PAGE: 42 TYPE: N

15. Refer to Fact Pattern 2-1. If Java and Kaffe have a long-standing business relationship that they would like to continue, a preferred method of settling their dispute may be mediation because

a. the case will be heard by a mini-jury. b. the dispute will eventually go to trial. c. the process is not adversarial. d. the resolution of the dispute will be decided an expert.

answer: C PAGE: 42 TYPE: N

16. Refer to Fact Pattern 2-1. Resolving the dispute between Java and Kaffe by having a neutral third party render a binding decision is one of the advantages of

a. arbitration. b. conciliation. c. intervention. d. mediation.

answer: A PAGE: 43 TYPE: N

17. Transnational Corporation and United Shipping, Inc., agree to a contract that includes an arbitration clause. If a dispute arises, a court having jurisdiction may

a. monitor any arbitration until it concludes. b. order an arbitrator to rule in a particular way. c. order a party to bring the dispute to court. d. order a party to submit to arbitration.

answer: D PAGE: 43 TYPE: N

18. National Consumer Goods Corporation and Paula Purchaser agree to resolve their dispute in arbitration. The arbitrator’s decision is called

a. a conclusion of law. b. a finding of fact. c. an award. d. a verdict.

answer: C PAGE: 43 TYPE: =

19.Lee files a suit against Grant. Lee and Grant meet, and each party’s attorney argues the party’s case before a judge and jury. The jury presents an advisory verdict, after which the judge meets with the parties to encourage them to settle their dispute. This is

a. court-ordered arbitration. b. early neutral case evaluation. c. a mini-trial. d. a summary jury trial.

answer: D PAGE: 45 TYPE: =

20. Dick submits his claim against EZ Sales Corporation to FairSettle.com, a private, online dispute resolution forum. At any time, an appeal of the dispute to a court may be made by

a. Dick only.
b. Dick or EZ.
c. EZ only.
d. neither Dick nor EZ.

ANSWER: B PAGE: 46 TYPE: +

Chapter 3 Court Procedures
1. The Federal Rules of Civil Procedure govern a civil trial held in a federal court.

ANSWER: t PAGE: 52 TYPE: =

2. The time cost of a lawsuit is not significant.

ANSWER: F PAGE: 53 TYPE: =

3. An answer can admit to the allegations made in a complaint.

ANSWER: T PAGE: 58 TYPE: =

4. Only a plaintiff may file a motion for judgment on the pleadings.

ANSWER: F PAGE: 60 TYPE: N

5. Only a defendant may file a motion for summary judgment.

ANSWER: F PAGE: 60 TYPE: N

6. A summary judgment will be granted when there are genuine issues of fact in a trial and no question of law.

ANSWER: F PAGE: 60 TYPE: =
7. A motion for summary judgment may be made before or during a trial.

ANSWER: T PAGE: 60 TYPE: =

8. There is a difference between depositions with written questions and interrogatories.

ANSWER: T PAGE: 61 TYPE: =

9. In a federal case at law involving more than $20 in damages, a defendant has the right to a jury trial.

ANSWER: t PAGE: 63 TYPE: =

10. Voir dire is a process for presenting evidence in a case.

ANSWER: f PAGE: 64 TYPE: =

11. Testimony given in court about what someone heard someone else say is not admissible as evidence.

ANSWER: T PAGE: 67 TYPE: +

12. A jury is free to ignore a judge’s statement of the facts in their case.

ANSWER: T PAGE: 68 TYPE: =

13. A jury verdict specifies the amount of the damages to be paid by a losing party.

ANSWER: T PAGE: 68 TYPE: =

14. A motion for a new trial will be granted only if the trial judge feels that it is appropriate to grant a judgment for the other side.

ANSWER: F PAGE: 69 TYPE: =

15. The standards for granting a motion for a judgment n.o.v. are often the same as the standards for granting a motion to dismiss.

ANSWER: T PAGE: 69 TYPE: =

16. A brief includes a statement of the applicable law in a case.

ANSWER: T PAGE: 69 TYPE: =

17. In most appealed cases, a trial court’s decision is affirmed.

ANSWER: T PAGE: 71 TYPE: =

18. An appellate court may elect to hear new evidence in a suit.

ANSWER: f PAGE: 71 TYPE: =

19. A case is remanded when it is sent back for further proceedings to the court that originally heard the case.

ANSWER: t PAGE: 71 TYPE: =

20. Every judgment is enforceable.

ANSWER: F PAGE: 72 TYPE: =

multiple choice questions

1. Glen retains Holly, an attorney, on a contingent-fee basis to seek $100,000 in damages in a personal-injury suit against Interstate Shipping Corporation. Glen wins. He must pay

a. court fees and other expenses, but not Holly’s fee. b. Holly’s fee, court fees, and other expenses. c. Holly’s fee only. d. neither Holly’s fee nor court fees and other expenses.

ANSWER: B PAGE: 53 TYPE: +

2. Ilsa files a suit against Jack. The document that sets out the ground for the court’s jurisdiction, the basis of Ilsa’s case, and the relief that Ilsa seeks is

a. the answer.
b. the complaint.
c. the service of process.
d. the summons.

answer: B PAGE: 54 TYPE: =

Fact Pattern 3-1 (Questions 3–4 apply)
Mack and Nancy engage in a business transaction from which a dispute arises. Mack initiates a lawsuit against Nancy by filing a complaint.

3. Refer to Fact Pattern 3-1. The sheriff serves Nancy with a summons. If Nancy chooses to ignore it

a. Mack must file an amended complaint.
b. Mack will have a judgment entered in his favor.
c. Nancy must be served with a second summons.
d. Nancy will have a judgment entered in her favor.

ANSWER: B PAGE: 54 TYPE: +

4. Refer to Fact Pattern 3-1. If Nancy responds to Mack’s complaint by filing a counterclaim, then

a. Mack will also have to file a response.
b. Mack will have a judgment entered in his favor.
c. Nancy will also have to file an amended answer.
d. Nancy will have a judgment entered in her favor.

ANSWER: A PAGE: 56 TYPE: +

5. Indelible Fabrics, Inc. (IFI), makes “Jean’s Denim,” a famous brand of clothing. Without IFI’s consent, Ken begins to use “jeansdenim” as part of a domain name. IFI files a suit against Ken. According to the court in Case 3.1, Rio Properties, Inc. v. Rio International Interlink, under the Constitution, service of process requires

a. equality and fairness in adjudication. b. liberty and justice for all. c. notice to the defendant and an opportunity to respond. d. privacy between the litigants and publicity in the judgment.

ANSWER: C PAGE: 57 TYPE: N

6. All-USA Imports, Inc., disputes the use of “all-usa.com” as a domain name by All-USA Overseas Exports, Ltd., and files a suit to resolve the dispute. According to the court in Case 3.1, Rio Properties, Inc. v. Rio International Interlink, under the Constitution, service of process must be by

a. e-mail and traditional means.
b. e-mail only.
c. traditional means only.
d. whatever means is reasonably calculated to do the job.

ANSWER: D PAGE: 57 TYPE: N
7.Opal files a complaint in a suit against Phil, and he files an answer. The case may now be

a. dismissed only after a trial begins.
b. dismissed or settled at this point.
c. resolved only after a trial ends.
d. settled only during a trial.

ANSWER: B PAGE: 58 TYPE: N

8. Linda files a suit against Kate. Kate denies Linda’s charges and sets forth her own claim that Linda breached their contract and owes Kate money for the breach. This is

a. an affirmative defense.
b. a counterclaim.
c. a crossclaim.
d. an irrelevant response.

answer: B PAGE: 58 TYPE: =

9. Ann files a suit against Beta Products, Inc. Beta responds that even if Ann’s statement of the facts is true, according to the law Beta is not liable. This is

a. a counterclaim.
b. a motion for judgment on the pleadings.
c. a motion for summary judgment.
d. a motion to dismiss.

ANSWER: D PAGE: 59 TYPE: N

10. Cody files a suit against Delta 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.

ANSWER: C PAGE: 60 TYPE: =

11. In Ed’s suit against First National Bank, the discovery phase would include all of the following except

a. Ed’s complaint. b. Ed’s deposition. c. Ed’s requests for First National’s admissions. d. First National’s replies to Ed’s interrogatories.

ANSWER: A PAGE: 60 TYPE: =

12. Standard Supplies Company files a suit against Tool Maker, Inc., over a contract. Before the trial begins, Standard can obtain from Tool

a. access to related documents in Tool’s possession.
b. accurate information about Tool’s trade secrets.
c. an admission of the truth of matters unrelated to the contract.
d. none of the above.

ANSWER: A PAGE: 62 TYPE: +

Fact Pattern 3-2 (Questions 13–15 apply)
Diners Corporation files a suit against Eateries, Inc.

13. Refer to Fact Pattern 3-2. During the trial, Diners’ attorney questions the plaintiff’s witness Floyd. This is

a. a cross-examination. b. a direct examination. c. an interrogatory. d. a request for admissions.

ANSWER: B PAGE: 67 TYPE: +

14. Refer to Fact Pattern 3-2. The attorney for Eateries also questions Floyd. This is

a. a cross-examination. b. a direct examination. c. an interrogatory. d. a request for admissions.

ANSWER: A PAGE: 67 TYPE: +

15. Refer to Fact Pattern 3-2. After Diners’ attorney’s presents the plaintiff’s case, the attorney for Eateries can

a. file a motion for a directed verdict only.
b. file a motion for a directed verdict or present the defendant’s case. c. neither file a motion for a verdict nor present the defendant’s case. d. present the defendant’s case only.

ANSWER: B PAGE: 67 TYPE: +

16. In Kay’s suit against Local Industries, Inc., the jury returns a verdict in Kay’s favor. Local Industries files a motion stating that even if the evidence is viewed in the light most favorable to Kay, a reasonable jury should not have found in her favor. This is a motion for

a. a judgment in accordance with the verdict.
b. a judgment on the pleadings.
c. a new trial.
d. judgment n.o.v.

answer: D PAGE: 69 TYPE: +

Fact Pattern 3-3 (Questions 17–20 apply)
Kelly files a suit against Lewis in a state court. The case proceeds to trial, after which the court renders a verdict.

17. Refer to Fact Pattern 3-3. If Lewis decides to appeal to a state appellate court, Lewis’s attorney must file, with the clerk of the trial court within a prescribed period of time

a. a formal refusal to abide by the verdict. b. a notice of appeal. c. a transcript of the trial and copies of the exhibits. d. the judgment order from which the appeal is taken.

ANSWER: B PAGE: 69 TYPE: +

18. Refer to Fact Pattern 3-3. If either party appeals, the clerk of the trial court will send to the clerk of the appellate court within a prescribed period of time

a. a brief including the arguments of both parties. b. a copy of the record on appeal. c. an explanation for the verdict. d. a statement of the grounds for reversal.

ANSWER: B PAGE: 69 TYPE: +
19.Refer to Fact Pattern 3-3. If Kelly decides to appeal to a state appellate court, Kelly’s attorney must file, with the clerk of the appellate court within a prescribed period of time

a. a demand to be heard. b. a motion for a judgment n.o.v. c. a notice of appeal. d. a request for affirmance, remand, or reversal.

ANSWER: C PAGE: 69 TYPE: N

20. Refer to Fact Pattern 3-3. If Lewis appeals to, and files a brief with, a state appellate court, Kelly’s attorney may file within a prescribed period of time

a. an advisory interrogatory. b. an answering brief. c. a request for a deposition. d. a responding motion for judgment on the brief.

ANSWER: B PAGE: 69 TYPE: +

Chapter 4

Constitutional Authority to
Regulate Business
TRUE/FALSE QUESTIONS

1. A federal form of government is one in which sovereign power is vested entirely in a central governing authority.

answer: f PAGE: 77 type: =

2. The federal government retains all powers not specifically delegated to the states.

answer: F PAGE: 77 type: N

3. The Constitution provides for three branches of government.

answer: t PAGE: 78 type: =

4. The state governments retain all powers not specifically delegated to the federal government.

answer: T PAGE: 78 type: N

5. The federal government cannot regulate commerce within a state, even if the commerce concerns more than one state.

answer: F PAGE: 79 type: =
6. The Constitution expressly excludes state regulation of commerce.

answer: F PAGE: 79 type: =

7. When state regulations impinge on interstate commerce, commerce must yield to the regulations, no matter how heavy the burden placed on commerce.

answer: F PAGE: 80 type: =

8. When there is a direct conflict between a federal and a state law, the state law is rendered invalid.

ANSWER: T PAGE: 80 type: =

9. Whether the federal government has preempted a certain area is always clear.

answer: F PAGE: 80 type: =

10. If a tax passed by Congress is reasonable, it is within the national taxing power.

answer: T PAGE: 81 type: =

11. Some constitutional protections apply to business entities.

answer: T PAGE: 81 type: =

12. The Bill of Rights confers absolute rights, not subject to interpretation by the United States Supreme Court.

ANSWER: F PAGE: 81 TYPE: =

13. Political speech that would otherwise be protected by the First Amendment loses that protection if its source is a corporation.

answer: f PAGE: 84 type: =

14. The First Amendment does not protect commercial speech as extensively as noncommercial speech.

answer: T PAGE: 85 type: +

15. A federal law that promotes a religion is constitutional.

answer: F PAGE: 87 type: +
16. A government law that restricts a fundamental right will be held to violate substantive due process unless it promotes a compelling or overriding state interest.

answer: T PAGE: 91 type: =

17. Any law that distinguishes between or among individuals violates the equal protection clause.

answer: F PAGE: 91 type: N

18. The terms “substantive due process” and “equal protection” mean the same thing.

answer: f PAGE: 92 type: =

19. Review of a law on a substantive due process basis and review of a law on an equal protection basis considers some similar questions.

ANSWER: T PAGE: 92 TYPE: +

20. There is a specific guarantee of a right to privacy in the Constitution.

answer: F PAGE: 92 type: =

MULTIPLE CHOICE QUESTIONS

1. American Business Coalition (ABC), a political lobbying group, wants a certain policy enacted into law. If ABC’s policy conflicts with the U.S. Constitution, a law embodying it can be passed by

a. any state legislature and Congress.
b. any state legislature but not Congress.
c. Congress but not any state legislature.
d. none of the above.

ANSWER: D PAGE: 77 TYPE: =

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

a. Congress writes checks and the president balances the budget. b. each branch of government has some power to limit the actions of the other branches. c. each branch of government may exercise the authority of the other branches. d. the president “checks” the courts, which “balance” the laws.

answer: B PAGE: 78 type: =
3. The state of New York regulates private activities to protect or promote the public order, health, safety, and general welfare under its

a. police powers. b. taxing powers. c. spending powers. d. supremacy powers.

answer: a PAGE: 80 type: +

4. Tom files a suit against the state of Utah, claiming that a Utah state law violates the commerce clause. The court will agree if the statute

a. imposes a substantial burden on interstate commerce. b. promotes the public order, health, safety, morals, or general welfare. c. regulates activities within Utah’s borders. d. regulates private activities.

answer: A PAGE: 80 type: =

5. If there is a direct conflict between a federal law and an Alaska state law

a. Alaska’s law takes precedence.
b. both laws are invalid.
c. both laws govern concurrently.
d. the federal law takes precedence.

ANSWER: D PAGE: 80 TYPE: +

6. Carl files a suit against the federal government to block the enforcement of a new tax law. Carl 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 is reasonable. b. invalidate the tax without considering whether it is reasonable. c. validate the tax if it is reasonable. d. validate the tax without considering whether it is reasonable.

answer: C PAGE: 81 type: +
7. The American Transportation Association wants the federal government to spend money to build a new highway. Congress can spend revenues

a. only to carry out Congress’s enumerated powers. b. to promote any objective that Congress deems worthwhile. c. without regard to whether the expense violates the Bill of Rights. d. without regard to whether the expense violates the Constitution.

answer: B PAGE: 81 type: =

8. Fred, the president of Good Retail Corporation, claims that certain actions by the federal government and the state of Hawaii infringe on rights guaranteed by the Bill of Rights. Most of these rights limit

a. neither the state government nor the federal government. b. the federal government only. c. the state government and the federal government. d. the state government only.

answer: C PAGE: 81 type: N

9. 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. the press, speech, and religion.

ANSWER: D PAGE: 82 TYPE: +

10. The Baytown City Council enacts an ordinance that bans the distribution of all printed materials on city streets. A court would likely hold that this law is

a. constitutional under the First Amendment. b. not governed by the Constitution. c. unconstitutional under the commerce clause. d. unconstitutional under the First Amendment.

answer: D PAGE: 82 type: +

11. A Metro City ordinance bans the sale of “violent video games” to minors. A court would likely hold this ordinance to be

a. an unconstitutional restriction of speech.
b. constitutional under the First Amendment.
c. justified by the need to protect individual rights.
d. necessary to protect local interests.

ANSWER: A PAGE: 82 TYPE: N

12. Lake City enacts an ordinance that bans minors between fifteen and seventeen years old from public places after 10 p.m. on weeknights unless accompanied by a parent or guardian. According to the decision in Case 4.1, Hodgkins v. Peterson, this ordinance impacts minors’ rights to

a. engage in interstate commerce under the commerce clause.
b. full faith and credit under Article IV, Section 1.
c. privileges and immunities under Article IV, Section 2.
d. worship, associate, and speak freely under the First Amendment.

ANSWER: D PAGE: 83 TYPE: N

13. Congress enacts the Tight Money Act (TMA) of 2006 to ban “major business entities” from making political contributions that individuals can make. A court would likely hold the TMA to be

a. an unconstitutional restriction of speech. b. constitutional under the First Amendment. c. justified by the need to protect individual rights. d. necessary to protect state interests.

answer: A PAGE: 84 type: +

14. Minnesota enacts a statute to ban advertising in “bad taste.” This statute would likely be held by a court to be

a. an unconstitutional restriction of speech. b. constitutional under the First Amendment. c. justified by the need to protect individual rights. d. necessary to protect state interests.

answer: A PAGE: 85 type: +

15. Xtreme Publications, Inc., disseminates obscene materials. Under numerous state and federal statutes, this is

a. a crime. b. a privilege under Article IV, Section 2. c a right under the commerce clause. d. a right under the First Amendment.

answer: A PAGE: 86 type: N

16. The police obtain a search warrant and search Dave’s apartment. After yelling obscenities at the officers, Dave confesses to a crime and implicates his friends. The Constitution protects against

a. obscene speech only. b. others’ implication only. c. unreasonable searches only. d. obscene speech, others’ implication, and unreasonable searches.

answer: C PAGE: 90 type: N

17. Colorado enacts a statute that limits the liberty of all persons, including corporations, to broadcast “annoying” radio commercials. This may violate

a. equal protection. b. procedural due process. c. substantive due process. d. the right to privacy.

answer: C PAGE: 91 type: +

18. Mary claims that a Nebraska state statute infringes on her “procedural due process” rights. This claim focuses on

a. procedures used in making decisions to take life, liberty, or property. b. the content of the statute. c. the similarity of the treatment of similarly situated individuals. d. the steps to be taken to protect Mary’s privacy.

ANSWER: A PAGE: 91 TYPE: +
19. South Carolina enacts a statute to impose a prison term, without a trial, on all street vendors who operate in certain areas. A court would likely hold this 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.

answer: C PAGE: 91 type: =

20. Urban City enacts an ordinance to allow only a few street vendors to operate in certain areas, for the purpose of reducing traffic. A court would likely hold this 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.

answer: B PAGE: 91 type: =

Chapter 5

Ethics and Business
Decision Making
1. Ethics is the branch of philosophy that focuses on what constitutes right and wrong behavior.

ANSWER: T PAGE: 97 TYPE: =

2. Ethics is not concerned with the philosophical, rational basis for morality.

ANSWER: F PAGE: 97 TYPE: =

3. Ethics is not concerned with the fairness, justness, or rightness of an action.

answer: F PAGE: 97 TYPE: =

4. Business ethics applies only to corporations.

ANSWER: F PAGE: 98 TYPE: N

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

ANSWER: F PAGE: 98 TYPE: N
6. The unethical conduct of corporate management is unlikely to affect the behavior of lower-level employees.

ANSWER: F PAGE: 99 TYPE: =

7. To foster ethical behavior among employees, managers should apply the ethical standards to which they are committed.

answer: T PAGE: 99 TYPE: =

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

ANSWER: F PAGE: 99 TYPE: +

9. Most large companies have established ethics programs.

ANSWER: T PAGE: 102 TYPE: =

10. Corporate ethical policies and programs must be coordinated and monitored to be effective.

ANSWER: T PAGE: 103 TYPE: =

11. An action may be ethical but illegal.

ANSWER: T PAGE: 106 TYPE: +

12. An action may be legal but not ethical.

answer: T PAGE: 107 TYPE: N

13. In the interest of preserving personal freedom, the law codifies all ethical requirements.

ANSWER: F PAGE: 107 TYPE: +

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

answer: F PAGE: 107 TYPE: =

15. Duty-based ethics may be based on religious precepts or philosophical reasoning.

answer: T PAGE: 108 TYPE: =

16. Under the principle of rights theory, one person’s set of values is as “right” as another’s.

ANSWER: F PAGE: 108 TYPE: =

17. If an action is ethical from an outcome-based perspective, it is always ethical from a duty-based perspective.

answer: f PAGE: 109 TYPE: +

18. In ethical terms, a cost-benefit analysis is an assessment of the negative and positive effects of alternative actions on individuals.

answer: T PAGE: 109 TYPE: =

19. The roles that women play in some foreign countries may present some difficult ethical problems for firms doing business internationally.

answer: T PAGE: 109 TYPE: =

20. Bribery of foreign government officials is both an ethical and a legal issue.

answer: T PAGE: 110 TYPE: =

multiple choice questions

1. Mack is sales manager for National Products, Inc. Compared to Mack’s personal activities, his business activities involve

a. more complex ethical standards.
b. simpler ethical standards.
c. the same ethical standards.
d. no ethical standards.

ANSWER: C PAGE: 97 TYPE: =

2. Tim works for Universal Sales Company. His job includes putting “spin” on the company’s successes and failures. In this context, ethics consist of

a. questions of rightness and wrongness.
b. the firm’s quarterly revenue.
c. whatever is legal.
d. none of the above.

answer: A PAGE: 97 TYPE: =
3. Any decision by the management of Standard Business Corporation may significantly affect its

a. operators only.
b. operators, owners, suppliers, the community, or society as a whole.
c. owners only.
d. suppliers, the community, or society as a whole only.

ANSWER: B PAGE: 98 TYPE: N

4. Eagle Manufacturing Corporation could demonstrate a commitment to ethical behavior by

a. complying with the law only. b. implementing ethical programs only. c. making a profit only.
d. complying with the law, establishing ethics codes, and making money.

answer: D PAGE: 102 TYPE: =

5. Ace Company manages its employees’ retirement benefit plan. With respect to this plan, Ace has

a. a fiduciary duty.
b. a subsidiary duty.
c. a utilitarian duty.
d. no duty.

ANSWER: A PAGE: 105 TYPE: N

6. Sam, the human resources director for Total Personnel Corporation, attempts to comply with the law in dealing with applicants and employees. One of the challenges Sam faces is that the legality of an action is

a. always clear.
b. never clear.
c. sometimes clear.
d. usually clear.

ANSWER: C PAGE: 107 TYPE: =
7. Many consumers misuse the products of Midwest Manufacturing, Inc., and are injured. In terms of responsibility for the consequences, Midwest may have

a. an ethical duty only.
b. a legal duty only.
c. an ethical and a legal duty.
d. neither an ethical nor a legal duty.

answer: A PAGE: 107 TYPE: =

8. 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.

ANSWER: B PAGE: 107 TYPE: =

9. Rob, the owner of Super Stores, Inc., adheres to the “principle of rights” theory. Under this theory, a key factor in determining whether a business decision is ethical is how that decision affects

a. the right determination under a cost-benefit analysis.
b. the rights of others.
c. the “right” thing to do.
d. the right to make a profit.

ANSWER: B PAGE: 108 TYPE: =

10. Kay follows certain religious principles. With respect to the behavior of Kay and other adherents of her religion, its principles are most likely

a. absolute.
b. changeable.
c. flexible.
d. vague.

ANSWER: A PAGE: 108 TYPE: N

11. Dina, an accountant for Excel Financial, Inc., attempts to apply the duty approach to ethical reasoning in conflicts that occur on the job. This approach is based on the idea that a person must

a. achieve the greatest good for the most people. b. avoid unethical behavior regardless of the consequences. c. conform to society’s ethical standards. d. place his or her employer’s interest first.

answer: B PAGE: 108 TYPE: N

12. Tina, the chief financial officer for USA Products Corporation, attempts to apply Christian precepts in making ethical decisions and in doing business. In applying duty-based ethical standards that are derived from a religious source, Tina would consider the motive behind an act to be

a. irrelevant. b. the least important consideration. c. the most important consideration. d. the only consideration.

answer: A PAGE: 108 TYPE: +

13. International Distribution Corporation suggests that its employees apply the “categorical imperative” to ethical issues that arise at work. This requires that the employees

a. categorize the issues according to legality, morality, and profitability. b. consider only the benefits that would accrue to them personally. c. look only at the result, regardless of the means to attain it. d. weigh the consequences that would follow if everyone took the same action.

answer: D PAGE: 108 TYPE: N

14. John decides to cheat on an examination to get into graduate school so that he can later volunteer to serve the needy with better skills. From an ethical perspective, John decides that

a. the “end” of his action justifies the “means.”
b. the “means” of his action justifies the “end.”
c. the “end” and the “means” of his action justify each other.
d. the “end” of his action can never justify the “means.”

ANSWER: A PAGE: 109 TYPE: =

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

a. moral values.
b. religious beliefs.
c. the consequences of an action.
d. the nature of an action.

answer: C PAGE: 109 TYPE: =

16. Tom, in making marketing decisions for United Products, Inc., takes a utilitarian perspective. A characteristic statement of this philosophy is

a. “an action is morally correct when, among the people it affects, it produces the greatest amount of good for the greatest number.”
b. “for every action, there is an equal and opposite reaction.”
c. “life in a state of nature is nasty, brutish, and short.”
d. “the pursuit by individuals of their self-interest will result in a corresponding increase in societal welfare.”

ANSWER: A PAGE: 109 TYPE: =

17. Harry, a vice-president of International Pharmaceuticals, Inc., does not apply utilitarianism to business ethical issues. One problem with utilitarianism is that it

a. gives business profits priority over production costs.
b. ignores the practical costs of a given set of circumstances.
c. requires complex cost-benefit analyses of simple situations.
d. tends to justify human costs that many find unacceptable.

ANSWER: D PAGE: 109 TYPE: +

18. In making decisions for United Merchandising Company, Jay uses a cost-benefit analysis. This is part of

a. duty-based ethics. b. Kantian ethics. c. the principle of rights. d. utilitarianism.

answer: D PAGE: 109 TYPE: =

19. To assist in detecting illegal bribes, Eagle, 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.

ANSWER: B PAGE: 110 TYPE: N

20. International Manufacturing Corporation’s side payments to government officials in exchange for favorable business contracts in foreign countries are considered, in the United States,

a. illegal and unethical.
b. illegal only.
c. neither illegal nor unethical.
d. unethical only.

ANSWER: A PAGE: 110 TYPE: +

Chapter 6

Intentional Torts
1. Tort law provides legal remedies for both personal injury and property damage.

answer: t PAGE: 120 TYPE: =

2. To commit an intentional tort, a person must intend the consequences of his or her act or know with substantial certainty that certain consequences will result.

answer: t PAGE: 121 TYPE: +

3. To commit an intentional tort, a person must act with a harmful motive.

answer: F PAGE: 121 TYPE: N

4. To commit an intentional tort, a person need not act with an evil motive.

answer: T PAGE: 121 TYPE: N

5. A battery occurs only if the victim suffers actual physical harm.

answer: f PAGE: 121 TYPE: =

6. False imprisonment is a tort only if the confinement or restraint is justified.

answer: F PAGE: 122 TYPE: =

7. One cannot recover damages for severe emotional distress absent a showing of personal injury.

answer: f PAGE: 122 TYPE: =

8. An oral defamatory statement must be communicated to a third party to be actionable.

answer: T PAGE: 122 TYPE: =

9. An individual’s right to privacy includes the exclusive use of his or her likeness.

ANSWER: T PAGE: 124 TYPE: +

10. An unauthorized scan of a bank account cannot be an invasion of privacy.

answer: F PAGE: 124 TYPE: N

11. An illegal search can be an invasion of privacy.

ANSWER: T PAGE: 124 TYPE: +

12. Normally, fraud occurs only when there is reliance on a statement of truth.

answer: F PAGE: 125 TYPE: =

13. Unintentionally causing a party to break a contract may constitute wrongful interference with a contractual relationship.

answer: F PAGE: 126 TYPE: =

14. Bona fide competitive behavior can constitute wrongful interference with a contractual relationship.

answer: F PAGE: 128 TYPE: N

15. An artisan’s lien is a defense to a charge of trespass to personal property.

answer: t PAGE: 129 TYPE: =
16. Disparagement of property is another term for appropriation.

answer: F PAGE: 131 TYPE: N

17. Good intentions are a defense against conversion.

ANSWER: F PAGE: 131 TYPE: N

18. An Internet service provider cannot be held liable in tort for disseminating his or her own defamatory remarks.

ANSWER: F PAGE: 132 TYPE: N

19. There are no statutes regulating the use of spam.

ANSWER: F PAGE: 135 TYPE: =

20. Federal law permits the use of unsolicited commercial e-mail but prohibits certain types of spamming activities.

ANSWER: T PAGE: 135 TYPE: N

multiple choice questions

1. Bob pushes Carol. Carol falls and breaks her arm. Bob is liable for the injury

a. if Bob intended to push Carol.
b. only if Bob did not intend to break Carol’s arm.
c. only if Bob had a bad motive for pushing Carol.
d. only if Bob intended to break Carol’s arm.

ANSWER: A PAGE: 121 TYPE: +

2. At Sea Food Cafe, Tom believes that he was overcharged and shoves Wally, a waiter. Wally sues Tom, alleging that the shove was a battery. Tom is liable if

a. Sea Food did not overcharge Tom.
b. the shove was offensive.
c. Tom acted out of malice.
d. Wally did not wait on Tom.

ANSWER: B PAGE: 121 TYPE: +

3. Dale hears Ed falsely accuse Flo of stealing from Great Warehouse, Inc., their employer. Ed’s statement is defamatory

a. because Dale heard it.
b. only if Ed made the statement loudly.
c. only if Ed’s statement is also published in the Dispatch, a local paper.
d. only if Flo suffers emotional distress.

ANSWER: A PAGE: 122 TYPE: N

4. Ace Corporation uses, in its radio ads, a recording by Blair, who owns the rights, without paying for the use. Over time, the song comes to be associated with Ace’s products. Blair sues Ace. Ace is liable to Blair for

a. appropriation. b. conversion. c. wrongful interference with a customary relationship. d. none of the above.

answer: A PAGE: 124 TYPE: N

5. Kelly is an appliance salesperson. Kelly commits fraud if, to make a sale, she

a. discloses the truth.
b. represents as a fact something that she knows is untrue.
c. states an opinion concerning something that she knows nothing about.
d. uses puffery.

ANSWER: B PAGE: 125 TYPE: +

6. Kay files a suit against Larry based on one of Larry’s statements that Kay alleges is fraudulent. To give rise to fraud, the statement must be one of

a. delusion. b. fact. c. opinion. d. truth.

answer: B PAGE: 125 TYPE: =

7. Excel Dry-Cleaning advertises so effectively that Next Day Cleaners’s regular customers patronize Excel instead of Next Day. Excel has committed

a. appropriation. b. wrongful interference with a business relationship. c. wrongful interference with a contractual relationship. d. none of the above.

answer: D PAGE: 128 TYPE: =

8. Curt, a dairy goods salesperson, follows Dona, a competitor’s salesperson, as she visits convenience stores to make sales. Curt solicits each of Dona’s customers. Curt is likely liable for

a. conversion.
b. trespass to personal property.
c. wrongful interference with a business relationship.
d. wrongful interference with a contractual relationship.

ANSWER: C PAGE: 128 TYPE: N

9. Joy invites Kent into her apartment. Kent commits trespass to land if he

a. enters the apartment with fraudulent intent.
b. harms the apartment in any way.
c. makes disparaging remarks about Joy to others.
d. refuses to leave when Joy asks him to go.

ANSWER: D PAGE: 128 TYPE: N

10. Betty owns a large ranch in Colorado. Dan drives his sport utility vehicle off a highway and onto Betty’s land. Dan commits trespass only if he

a. does not have Betty’s permission to drive on the property.
b. drives onto the property for recreational purposes.
c. harms the property in a material way.
d. harms the property in any way.

ANSWER: A PAGE: 128 TYPE: =

11. Jane enters onto Sam’s property to help someone in danger. If Sam charges Jane with trespass to land, Jane has

a. no defense. b. a possible defense. c. a partial defense. d. a complete defense.

answer: D PAGE: 129 TYPE: =

12. Ned leaves his car with OK Car Shop to have it repaired. After the car is fixed, OK keeps it. OK is not liable for trespass to personal property if

a. Ned refuses to pay for the repair.
b. Ned thinks his car is a “joke.”
c. OK is keeping the car as a “joke.”
d. OK received payment for the repair.

ANSWER: A PAGE: 129 TYPE: N

13. As a joke, Fran hides Gary’s business law book so that he cannot find it during the week before the exam. Fran is liable for

a. appropriation.
b. disparagement of property.
c. trespass to personal property.
d. wrongful interference with a business relationship.
ANSWER: C PAGE: 129 TYPE: +

14. Alpha, Inc., uses a bot to continually comb the Web site of Beta Company for information and its updates. In line with the decision of the court in Case 6.2, Register.com, Inc. v. Verio, Inc., Alpha has most likely committed

a. assault.
b. conversion.
c. trespass to personal property.
d. no tort.
ANSWER: C PAGE: 129 TYPE: N

15. Quinn, a clerk at PC Computer Store, takes a computer from the store without PC’s permission. Quinn is liable for conversion

a. if he damages the computer. b. if he does not have a good reason for taking the computer. c. if he fails to prevent a theft of the computer from his possession. d. under any circumstances. answer: D PAGE: 131 TYPE: +

16. Axel steals a business law textbook from Beth. Curt, who does not know that the book is stolen, buys it from Axel. Curt has committed

a. conversion. b. disparagement of property. c. no tort. d. wrongful interference with a business relationship.
ANSWER: A PAGE: 131 TYPE: N

17. Steve, a television news reporter, knowingly broadcasts an untrue story claiming that Medi-Drugs, Inc., markets a medicine for children that contains highly addictive drugs. Steve is liable for

a. slander of quality. b. slander of title. c. wrongful interference with a business relationship. d. none of the above. answer: A PAGE: 131 TYPE: =

18. Sue writes a defamatory article about Tony. The article is disseminated through the print media, via newspapers, and online, via an Internet service provider (ISP). Most likely to be held liable for the article are Sue and
a. the ISP only.
b. the newspapers only.
c. the ISP and the newspapers.
d. none of the above.

ANSWER: B PAGE: 132 TYPE: N

19. Beta Services (BS) is an Internet service provider. On a BS online bulletin board, Carl, a BS customer, posts a defamatory remark about Delta Company. Delta could successfully file a suit against

a. BS only.
b. Carl only.
c. BS or Carl.
d. none of the above.
ANSWER: B PAGE: 132 TYPE: N

20. Direct Marketing, Inc., floods the e-mail boxes of the employees of Eagle Products Corporation with unsolicited ads to the extent that the employees cannot e-mail each other. Direct has committed

a. assault.
b. conversion.
c. trespass to personal property.
d. none of the above.
ANSWER: C PAGE: 134 TYPE: =…...

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