Legal Environment- Test 4

The Federal Aviation Administration uses notice-and-comment rulemak-ing. The final rule in such a proceeding is sometimes referred to as

a legislative rule

Squeaky Clean Corporation wants to make an offering of securities to the public. This offering is not exempt from registration under the Securities Act of 1933. Before Squeaky sells its securities, it must provide investors with

a prospectus

Under federal law, the calorie content of the food on a menu must be posted by Organic Mix, LLC, if Organic Mix is

a restaurant chain with twenty or more locations

The Consumer Product Safety Commission (CPSC) wants Monster Toy Company to produce certain records for review. To obtain the records, the CPSC will issue

a subpoena

Master Manufacturing Corporation has exclusive control over the market for its product. Under the Sherman Act, this is

a violation if it acquired this power through "anticompetitive means"

Big U.S. Oil Company joins with a foreign cartel to control the price of oil. If the cartel has a substantial effect on U.S. commerce

both Big US Oil and the foreign cartel can be used for violation of U.S. antitrust laws

A collection agency has the right to contact a debtor at the debtor's place of employment whether or not the debtor's employer objects. ​

false

Corporate governance can be defined as the relationship between a corporation and its directors.

false

Final administrative rules do not have binding legal effect unless the courts later declare them to be binding.

false

Generally, federal securities laws are patterned after states' antifraud laws.

false

Predatory pricing involves selling a product at prices substantially above the fair market value.

false

Violations of the Securities Exchange Act of 1934 may be subject to criminal prosecution, but not civil liability.

false

Willful violations of the Securities Act of 1933 may be subject to civil liability, but not criminal prosecution.

false

A suit is filed against Dormroom Furniture Unlimited, Inc., alleging that the firm has committed the offense of monopolization. To determine whether Dormroom has committed this offense, the court will consider the extent of Dormroom's market power and

how dormroom acquired its power

To raise $12 million to expand operations, Star Corporation makes a stock offering directly to sixty accredited investors and twenty sophisticated, but unaccredited investors. Star plans to notify the SEC of sales. Under the Securities Act of 1933, this issue may qualify as an "exempt" transaction

if all of the investors are also given certain material information

Gourmet Foods, Inc., requires all distributors of its products to sell them at a specified minimum price. Under the Sherman Act, this is a violation

if the anticompetitive effects outweigh the competitive benefits

A trade association

may be legal if it is sufficiently beneficial to both the association and the public

SmartPhone Company's ad states that its product is "The Best that Money Can Buy." Because of this ad, the Federal Trade Commission is most likely to issue

none of the choices

Consumer Finance Corporation (CFC) extends credit to consumers. CFC is subject to the Equal Credit Opportunity Act, which prohibits credit dis-crimination based on ​

race

To fall under the Sherman Act, an activity must

substantially affect interstate commerce

The U.S. Citizenship and Immigration Service issues a rule. Like the rules of other federal administrative agencies, this rule is compiled in

the code of federal regulations

When applying the rule of reason to determine whether an agreement violates Section 1 of the Sherman Act, a court will not consider

the effect of the agreement on international trade

After notice-and-comment rulemaking, the U.S. Bureau of Land Management (BLM) issues a new rule and applies it to Clearcut Timber Company. Clearcut appeals the application to a federal court. The court will most likely defer to the BLM's interpretation of

the fact and the law

Debt & Loan Collection Agency calls Ethel several times a day, and sometimes in the middle of the night, about an overdue bill that a Furniture4U store turned over to Debt & Loan for collection. This is a violation of

the fair debt collection practices act

The U.S. Social Security Administration is a federal agency. The Iowa Department of Social Services is a parallel state agency. If these agen-cies' regulations conflict

the federal agency's regulations take precedence

Global Investments Corporation buys and sells securities. Section 10(b) of the Securities Ex-change Act of 1934 applies to

the purchase or sale of any security

Teri borrows $10,000 from USA National Bank to remodel a room in her home. This transaction is subject to ​

the truth in lending act

Tory borrows $10,000 from USA National Bank to remodel a room in her home. This transaction is subject to

the truth in lending act

GR8 Stuf Company files a registration statement with the SEC before making an offering to the general public. The registration contains false, immaterial statements of which the investors are unaware. GR8 Stuf is charged with violating the Securities Act of 1933. GR8 Stuf's best defense is

the untrue statements were not material

Advertising that appears to be based on factual evidence will not be deemed deceptive even if it is not reasonably supported by evidence.

true

All federal government agencies must make their records available electronically on the Internet.

true

Any time a consumer is denied credit or insurance on the basis of his or her credit report, the consumer must be notified of that fact. ​

true

Charging different prices to different buyers for identical goods is price discrimination.

true

SEC Rule 10b-5 applies to almost all cases involving the trading of securities.

true

SEC Rule 10b-5 prohibits the commission of fraud in connection with the purchase or sale of any security.

true

The Fair Debt Collection Practices Act generally applies only to debt-collection agencies that regularly attempt to collect debts on someone else's behalf. ​

true

The basic purpose of antitrust law is to regulate economic competition.

true

The period for persons to comment on a proposed administrative rule must be at least thirty days.

true

The public must be provided with adequate advance notice of scheduled federal administrative agency meetings and agendas.

true

The U.S. Patent and Trademark Office (USPTO) wants to review certain records of Verity Corporation. The USPTO can legitimately gain access to the records through

verity's consent