BA 325 Final

An independent contract is, by definition, an employee

False

Restraints of trade are laws that regulate economic competition

False

Federal overtime provisions apply only after a covered employee works more than

40 hours a week

An employer cannot discharge a worker who, in good faith, refuses to work in a high-risk area if bodily harm or death might result

True

Corporate "outsiders" may be held liable for insider trading under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5

True

Every act of a partner concerning partnership business binds the firm.

True

Federal wage-hour requirements apply to all employers engaged in interstate commerce, in producing goods for interstate commerce, and in certain other businesses

True

In some situations, the courts find an agency relationship where there is no formal agreement

True

Insider trading is prohibited because trading on the basis of inside information can give the trader an unfair advantage over the investing public

True

The power to control the market price of a product is market power

True

Mountain Crest Inc. makes and distributes its branded products to authorized dealers. To prevent price-cutting by dealers in direct competition, the firm imposes limits on where each dealer can sell the products. This is

A territorial restriction

Under the Age Discrimination in Employment Act, the plaintiff must show that unlawful discrimination was only one of the reasons for an adverse employment action

False

Ruby is interested in buying a franchise from Snax Stores Inc. This transaction, like other franchise deals, is regulated to protect

Prospective franchises from dishonest franchisors

Rena establishes and operates Sweet Homes, a construction-contracting outfit, as a sole proprietorship. In the course of doing business, the outfit fails to pay some of its debts. To satisfy the obligations, the firm's creditors can go after

The firm's assets and owner's personal assets

In a sole proprietorship, the proprietor bears the burden of any liabilities incurred by the business enterprise

True

Proving an antitrust violation requires showing a misuse of market power

True

Section 2 of the Sherman Act essentially condemns the act of monopolizing, not the possession of monopoly power

True

The proprietor pays only personal income taxes on a sole proprietorship's profits

True

The rule of reason represents a more flexible economic analysis of agreements among competitors than the rigid application of a per se standard

True

To avoid a conviction in a criminal prosecution under the securities laws, there must be at least a reasonable doubt that the defendant knew he or she was acting wrongfully.

True

To protect a franchisor's reputation, a franchise contract may provide a degree of control over the franchisee's operation to the franchisor.

True

Under the principles of agency law, any sale of goods by a salesperson in a store to a customer can be binding on the owner of the store

True

When directors and officers do not act in the best interests of their corporations, the shareholders may sue them on the company's behalf

True

When it comes to managing a corporation, the corporation relies on its board of directors and officers

True

While the SEC reviews a registration statement for completeness, most issuers can distribute a free-writing prospectus

True

Health Food Inc. coordinates the purchase, sale, and delivery of organic products. The stated corporate purpose is to make a profit and to have a material positive impact on society and the environment. Health Food is

a benefit corporation

Pipeline Corporation requires its employees to have a high school diploma. In a suit against Pipeline under the Civil Rights Act, the employer shows a connection between a high school education and job performance. This is

a business necessity defense

As part of a stock offering for Design Media Corporation, the firm's accountant Eve intentionally misrepresents material facts in the prospectus. Fred buys the stock unaware of the misrepresentation and suffers a loss. Eve may be subject to

a fine, imprisonment, and damages.

Diamonds & Gold LLC hires Elle to buy gems and precious metals from various sources on its behalf. In this relationship, Diamonds is

a principal

Pump Makers Inc. makes pumps for fire trucks and conditions shipments of its products to Quality Motors Corporation - a maker of fire trucks - on Quality's agreement to buy additional pumps only from Pump Makers. This is

an exclusive-dealing contract

eGames Inc. employs four hundred workers at three locations in three states. Workers who lose their jobs with eGames have a right to continued health-care coverage under the company's group plan unless they

are fired for gross misconduct

Kay and Leo form Metro Delivery Inc. Responsibility for all policymaking decision necessary to the management of corporate affairs rests with Metro's

board of directors

Curly Fries Inc. grants its agent Dian an exclusive territory in which to sell its products. The company cannot compete with Dian in that territory under the duty of

cooperation

Online Media Inc. bundles its products so that consumers are forced to pay for access to some sites that they do not want in order to obtain access to sites that they do want. A court will likely rule that the bundling does not violate the rule of reason if it

does not injure competition

Antitrust legislation is based on the society's desire to

foster competition

Federal employment discrimination laws restrict the ability of employers to discriminate against workers on the basis of

gender

Cosmetique Inc. makes and sells cosmetics and related products. By selling its goods at prices substantially below the normal cost of production, the firm hopes to drive its competitors from the market. This is

predatory pricing

Oversight Inc.'s board of directors votes to empower corporate officers to make decisions regarding ordinary, daily corporate affairs within well-defined guidelines. With respect to these affairs, Oversight's board

retains its responsibility

Roz, a director of Soy Inc., is specially trained in petroleum trading. Soy's board approves several deals in which the company pays too much for soybeans. Roz approves all the deals without first reviewing them. Roz is most likely liable for breach of

the duty of care

Energy Company employs Fred to negotiate the purchase of mineral rights for future mining projects. Fred secretly buys some of the property and sells it to Energy at a profit. Fred has breached

the duty of loyalty

Blue Sky Drones Inc. has three directors, a president, two vice presidents, a secretary, and a treasurer. Carol is a Blue Sky director. In most states, Carol can also hold a corporate office

under any circumstances

Lev, an agent for Mill Grains LLC, executes an unauthorized contract with National Grocers Inc. The deal is highly advantageous to Mill Grains, and the company ratifies the contract. The contract is

valid

Integrated Devices, Inc., is a private, for-profit corporation that is owned by seven shareholders who are members of the same family. Integrated is

a close corporation

Under the Equal Pay Act, an employer can legitimately pay different wages to male and female employees on the basis of

any factor other than gender the primary duties of the jobs seniority or merit system

Furnaces & Filters Inc. is a public company whose shares are traded in the public securities markets. Under the Sarbanes-Oxley Act of 2002, to ensure that the firm's financial results are accurate and timely, its senior officers must set up and maintain

internal "disclosure control and procedures"

Nevis and Olsen want to do business as a corporation - Pastries & Pies Inc. The procedure for forming this firm is prescribed by

state law

An investment contract in a franchise does not qualify as a security

False

Stocks represent corporate debt

False

Gil is an officer for HVAC Corp. Due to Gil's choice of a certain supplier, HVAC's costs are somewhat higher than they might have been if a different supplier had been chosen. Gil is most likely liable for breach of

none of the choices The choices: negligence or mismanagement trust and confidence the business judgement rule

The purpose of the Securities Act of 1933 is to regulate a security's investment price

False

Because each type of franchise relationship is similar, franchise contracts tend to be similar.

False

A limited liability partnership (LLP) allows professionals to avoid personal liability for the malpractice of other partners

True

An employer can avoid liability for sexual harassment by taking prompt remedial action

True

Rosario is a chef and caterer who hires out on a per-project basis to companies with on-location work sites, as well as to the hosts of banquets and other events. In this capacity, Rosario is

an independent contractor

Gary drives a truck as an employee for Hauling Inc. Gary would most likely be considered acting outside the scope of her employment if he

crashed into a car at the airport while off duty

Fabrication Corporation is a public company whose shares are traded in the public securities markets. Under the Securities Act of 1933, Fabrication is required to

disclose all essential information about the issuance of its securities

An employer can avoid liability under the Title VII by showing that the employer's standards for hiring and promoting have a substantial, demonstrable relationship to realistic qualifications for the job at issue

True

Only a managing partner has the right to full and complete information concerning the conduct of all aspects of partnership business

False

Actual authority in an agency relationship arises from what a principal makes clear to a third party

False (agent)

Among three partners, unless they agree otherwise, unanimous consent is required to manage the business of the partnership

False (majority)