Law and Business Quiz 5

Which of the following statements is true of closely held business organizations?

A family-operated business is an example of a closely held business organization.

If Joan, a minority shareholder in the closely held corporation Back Alley Bricks, brings a derivative lawsuit on behalf of the corporation, challenging a contract the corporation made with Brandon, an officer and majority shareholder, who has the burden to prove the contract was made in good faith?

Brandon

Which of the following statements is true of a general partnership?

Each partner in a general partnership has an equal voice in the firm's affairs

Investigating agencies use the ________to measure market concentration and determine the impact of a proposed merger.

Herfindahl-Hirschman Inde

Which of the following statements is true of corporations?

In contrast to a partnership, corporations are usually formed to have perpetual existence.

Which of the following statements is true of the doctrine of exhaustion of remedies?

It allows an agency to discover and correct its own errors, and thus it helps to dispense with any reason for judicial review.

Which of the following has a perpetual existence so long as the number of shareholders is limited?

S corporation

Which of the following statements is true of the functionality of agencies providing services?

Social Security programs necessitate that there be a federal agency to determine eligibility and pay benefits.

Which of the following federal agencies seeks to prevent discrimination in employment based on race, color, religion, sex, or national origin and other unlawful employment practices?

The Equal Employment Opportunity Commission (EEOC)

Which of the following statements is true of the executive director in an administrative agency?

The executive director is the chief operating official of an agency and supervises usual administrative functions.

Which of the following is the basic difficulty of owning a minority interest in a closely held corporation?

There is no ready market for the minority stock should a shareholder desire to dispose of it.

Choose the statement below that is true of administrative agencies?

They are organizations created by the legislature to serve a specific purpose.

Which of the following statements is true of benefit corporations?

They combine aspects of non-profit and profit organizations in a way intended to permit a business to make a profit while pursuing explicit, socially oriented goals.

Which of the following is a taxable entity?

a corporation

While selecting a name for a partnership, if the name is other than that of the partners, the partners must give notice as to their actual identity under the state's ________.

assumed-name statute

A corporate form that requires directors to ensure the corporation confers a public benefit is called a________.

benefit corporation

Which of the following is an order that an agency imposes on a violator to stop an objectionable activity and refrain the violator from any further violations?

cease and desist order

A(n) ________ is designated as such at the time of nomination by the president and is the presiding officer at agency meetings.

chairperson

In a(n) ________, the shareholders are taxed only on income distributed.

corporation

A delegation of authority to an administrative agency must be ________and it must have ________ in order to be constitutional.

definite, limitations

Administrative law judges are

employed by the agency that is in charge of hearing the initial presentations.

The ________ power of administrative agencies is primarily to investigate, prosecute, advise, and supervise.

executive

The ________ has significant impact on policy and is often as powerful as a commissioner or board member.

general counsel

Trusts are a legal arrangement in which a fiduciary

holds legal title to property for benefit of another.

One of the most significant creation-related issues to consider when selecting a business's organizational form is

how much time it will take to create a particular organization.

In ________, the price of goods and services is limited to levels that tend to discourage new entry to markets.

limit pricing

Which of the following organizations allows members to continue the business of the dissolved organization rather than cease operations in the event of a death or withdrawal of a member?

limited liability company

Under the Colgate doctrine, the Supreme Court recognizes that

manufacturers can announce their prices and refuse to deal with those who fail to comply.

Which of the following is a violation of the Sherman Act?

price fixing agreements between large companies

Lutite, a lighting corporation, acquires and merges with Castelle, a kitchen company in a billion-dollar merger. Lutite, prior to the merger, sold only lighting products. After the merger, Lutite sells lighting and kitchen products. The merger between Lutite and Castelle is an example of a ________.

product extension merger

Technically, a(n) ________ is an agent appointed by a shareholder for the purpose of voting the shares.

proxy

Which of the following type of regulatory authority issues rules that have the impact of laws?

quasi-legislative

One party offers to buy the other's goods but only if the second party buys other goods from the first party. This is known as a(n) ________.

reciprocal dealing arrangement

The Robinson-Patman amendment gives the Federal Trade Commission jurisdiction and authority to

regulate quantity discount

Which federal agency promotes dependable, affordable energy through sustained competitive markets?

the Federal Energy Regulatory Commission (FERC)

Which of the following federal agencies protects the public from anticompetitive behavior and unfair and deceptive business practices?

the Federal Trade Commission (FTC)

Under the Sherman Act the following statement is true:

the Sherman Act applies to both the sale of goods and the sale of services.

Louise Bouton, a designer and manufacturer, sells luxury shoes to stores across the nation including Lordstorms. Louise entered a contract with Lordstorms to price her shoes higher than any other shoes in the store and forced Lordstorms to lower the prices of similar luxury shoes. If a competitor files suit they would most likely allege Louise and Lordstorms engaged in a

vertical agreement in violation of the Sherman Act.

Risle Inc. is a paper supply company. One of its largest customers is Allende Publishers, a publishing house that makes books. If Risle Inc. decides to acquire and merge with Allende, the merger is most likely to be called a ________.

vertical merger