Business Law Test
Business Law II Test/Chapters 47-50
Student: ___________________________________________________________________________
1.
Identify the letter of the choice that best completes the statement or answers the question.
The Department of Homeland Security:
A. has been proposed but has never been created.
B. is a non-profit organization.
C. is a Cabinet-level Department.
D. will have little effect on the federal government's organization.
2.
Which of the following is an accurate statement about the Administrative Procedure Act?
A. It sets forth the procedure Congress must follow in order to create a new administrative agency or abolish an existing one.
B It establishes a presumption that administrative agency actions are reviewable by courts only if
. …show more content…
Congress has expressly made them reviewable.
C. It applies to executive and independent agencies.
D. Each of the above.
3.
Assume that the Occupational Safety and Health Administration (OSHA) begins an investigation of Acme Company in March 2004. Further assume that Acme Company is owned by the leading
Democratic Presidential candidate for the 2004 Presidential election, Jane Acme. This investigation:
A. must not be undertaken solely to harass Jane Acme.
B. must be done with a warrant.
C. includes the power to subpoena witnesses, except those who are unwilling to testify.
Dincludes the power to use subpoenas duces tecum, but only if OSHA demonstrates the probable cause
. required by the Fourth Amendment for the issuance of search warrants.
4.
Which of the following is an accurate statement about powers delegated to and possessed by administrative agencies?
A.The most important administrative agencies typically possess investigative and rulemaking powers but not adjudicatory powers.
B. An agency's rulemaking power would be classified as discretionary power rather than ministerial.
C. Modern courts have tended not to uphold the validity of broad delegations of power by Congress to administrative agencies.
DIn view of the constitutional principle of separation of powers, administrative agencies are not given
. powers typically associated with the three traditional branches of the government.
5.
Which of the following is an accurate statement about the Privacy Act of 1974?
A It bars administrative agencies from gathering information about private citizens unless the agencies
. have obtained a court order justifying the information gathering.
B. It is frequently used by public interest groups to obtain information useful to the advancement of their public causes.
C It forbids administrative agencies from disclosing, for any purpose, the records in a file on a person
. unless that person has expressly consented to the disclosure.
D It allows persons to inspect files kept on them by administrative agencies and to request corrections of
. erroneous or incomplete information.
6.
Most federal administrative agencies have the power to:
A. arbitrate disputes involving private parties' rights of action on subjects within the agencies' expertise.
B. investigate alleged violations of the statutes they administer.
C. bring criminal prosecutions against violators of the regulations they have adopted.
D. do all of the above.
7.
An agency's interpretive rules:
A. are not binding on businesses and the courts.
B. specify how the agency will conduct its hearings.
C. have the full force and effect of law.
D. are seldom heeded by business because of their advisory nature.
8.
When a decision of an administrative law judge (ALJ) is subjected to de novo review,
A. it will be reviewed only for evidence of bias.
B. the ALJ's findings must be adopted by the agency's governing body unless the findings were arbitrary and capricious.
C. the ALJ's findings may be totally ignored by the agency's governing body.
D. it will be reversed unless a refusal to reverse would be arbitrary and capricious.
9.
Which of the following constitutional checks does not apply to actions of administrative agencies?
A. The freedom of speech guarantee.
B. The due process guarantee.
C. The equal protection guarantee.
D. None of the above (i.e., each of the above is a potential check on agency actions).
10. The difference between executive agencies and independent agencies is that:
A. independent agency heads are appointed by Congress
B. independent agency heads serve fixed terms in office
C. executive agency heads are appointed by executives of corporations
D. executive agency heads serve at the pleasure of Congress
11. An administrative agency subpoena may have the power to require production of
A. witness testimony only
B. document production only
C. either document production or witness testimony but not both
D. both document production and witness testimony
12. Which of the following would keep the Truth in Lending Act from applying to a transaction?
A. The debtor's intent to make a commercial use of funds borrowed in the transaction.
B. The transaction's open-end credit feature.
C. The debtor's being a natural person rather than a business entity.
D. The creditor's being a credit card issuer rather than a maker of a conventional loan.
13. Kim is a salesperson for Bizlaw, Inc., which sells software containing legal forms to businesses. Mel,
President of Bizlaw, Inc., advises Kim not to share the Bizlaw written warranty with consumers by explaining to them that he does not carry copies of the warranty with him. Following Mel's suggestion would: A. violate the Magnuson-Moss Act.
B. would not violate the Magnuson-Moss Act if Kim actually does not carry the warranty with him.
C.would not violate the Magnuson-Moss Act because Bizlaw products are not "consumer products" within the meaning of the Act.
D. would not violate the Magnuson-Moss Act because the Act does not require sellers to give written warranties. 14. Which of the following actions or statements by a debt collector would be least likely to violate the Fair
Debt Collection Practices Act?
A. Contacting the debtor's adult son to determine whether the debtor has the financial resources to pay the debt. B. Telling the debtor that a failure to pay the debt would likely land the debtor in jail.
C. Repeatedly telephoning the debtor at home after she arrives home from work.
D.Telling the debtor that if she does not pay the debt, the creditor intends to sue her (an accurate statement of the creditor's intent).
15. Discrimination in the denial of credit does not violate the Equal Credit Opportunity Act if it was based on the applicant's
A. age.
B. marital status.
C. sexual orientation.
D. religion.
16. The FTC has initiated an adjudicative proceeding against Shiftico, Inc. on the theory that Shiftico made deceptive statements in advertisements designed to promote the sale of its product. In order to establish deceptiveness, the FTC must prove
A. that Shiftico's statements pertained to material matters.
B. that Shiftico intended to deceive consumers by means of its statements.
C. that some reasonable consumers actually were deceived by Shiftico's statements.
D. each of the above.
17. The Consumer Product Safety Commission may:
A. issue a rule banning a pesticide if the pesticide poses serious danger to the public.
B issue a product safety standard when the product in question presents an unreasonable risk of injury and
. the standard is reasonably necessary to prevent or reduce that risk.
C. sue in federal court in an effort to eliminate the dangers presented by an imminently hazardous motor vehicle. D. do each of the above.
18. When the FTC brings an unfairness proceeding against a respondent,
A. the practice engaged in by the respondent may be found unfair regardless of whether it was deceptive.
B.a likelihood of consumer injury will be sufficient to support a finding of unfairness if the other elements of unfairness are present.
C. the allegedly unfair act by the respondent cannot have been something other than advertising.
Dthe respondent will prevail if the harm caused by the challenged practice is not outweighed by any
. offsetting consumer or competitive benefits produced by the challenged practice.
19. Which of the following Federal Trade Commission issuances has/have the force of law?
A. advisory opinions
B. industry guides
C. trade regulation rules
D. all of the above
20. The CAN-SPAM Act of 2004 outlawed various commercial email practices. These include:
A. false information in the "from" line
B. false information in the "subject" line
C. sexually oriented material without a warning
D. all of the above
21. Which of the following is an example of an exclusive dealing agreement?
AA McDonald's franchisee alleged that McDonald's violated section 1 by requiring franchisees to lease
. their stores from McDonald's as a condition of acquiring a McDonald's franchise.
BAn oil company with a chain of wholly owned gas stations refuses to purchase the tires it sells in
. those stations unless the tire manufacturer seeking to supply the tires agrees to purchase, from the oil company, the petrochemicals used in the tire manufacturing process.
C. Toot Sweet, Inc., a candy manufacturer, agrees to buy all of its sugar requirements from Sure Gar, Inc., a sugar manufacturer.
D. Two competing firms form a joint sales agency and authorize it to fix the price of their products.
22. Which of the following is not a violation of Section 1 of the Sherman Act?
A. Conscious parallelism by various competitors.
B. A conspiracy that unreasonably restrains trade.
C. Concerted refusals to deal with a certain business party.
D. A contract that unreasonably restrains trade.
23. Acme Corp. has captured 90% of the national market for commodity "X." Acme is most likely to be liable for monopolization under section 2 of the Sherman Act if "X" is:
A. felt-tip pens.
B. cellophane.
C. men's underwear.
D. yellow legal pads.
24. Hardware retailers Deuce Hardware Co. and Trueblue Hardware Corp. agreed to a schedule of maximum prices that they will pay to hardware wholesalers with whom they deal. Under these circumstances, which of the following statements is correct?
A Their action would be lawful if they could convince the court that any lower prices produced by their
. agreement would be passed on to consumers.
B. Their action is lawful because only sellers can be guilty of price-fixing.
C Their action would be lawful if they could convince a court that they lacked sufficient market power to
. force wholesalers to reduce their prices in response to their agreement.
D. Their action is per se unlawful.
25. Nevco, Inc. has cornered 85% of the widget market in the southwestern states. Nevco is least likely to be liable for monopolization under section 2 of the Sherman Act if:
A. its share of the national widget market is only 35%.
B it acquired its market share by offering vastly superior products at competitive prices, but preserved it
. by using local below-cost pricing to drive out would-be competitors.
Cit acquired its market share solely due to a great decline in the popularity of widgets in the southwestern
. states--a decline that caused most other firms to cease selling widgets in that region of the country.
D it acquired its market share by ruthlessly underselling its competitors and using other illegal practices,
. but charged fair prices after acquiring monopoly power.
26. If a plaintiff proves that it has suffered a direct injury by another company in violation of the Sherman
Act, it is entitled to recover:
A. only the amount of loss it suffered as a result of the violation
B. only two times the amount of loss it suffered as a result of the violation
C. only three times the amount of loss it suffered as a result of the violation
D. three times the amount of loss it suffered as a result of the violation, plus reasonable attorneys' fees
27. In an anti-trust case alleging illegal tying, what must the plaintiff prove?
A. the tying product and the tied product are two separate products
B. a "not insubstantial" amount of commerce in the tied product is affected
C. the defendant company has substantial market power in the tied product
D. two of the above are correct, a and b
28. Which of the following is not an element of a plaintiff's claim that a tying arrangement violated the
Clayton Act?
A. Proof that the sale of the tying product was conditioned on an accompanying sale of the tied product.
B. Proof that the seller has substantial market power in the market for the tied product.
C. Proof that the seller's tying arrangements restrained a "not insubstantial" volume of commerce in the tied product.
D. None of the above (i.e., each of the above is an element of the claim).
29. Vertical mergers:
A. are those mergers that take place between formerly competing firms.
B. do not directly result in an increase in concentration but may threaten competition in various ways.
C. automatically violate Clayton Act Section 7 because of their inherently anticompetitive nature.
Dmay produce economic efficiencies, but efficiency arguments are less favorably viewed by the Justice
. Department in vertical merger situations than in horizontal merger cases.
30. Congress passed the Clayton Act in 1914 because the Sherman Act of 1890 had been:
A. less effective than had been expected in curbing monopolistic practices, so the Clayton Act strengthened anti-trust law
B more effective than had been expected in curbing monopolistic practices, so the Clayton Act weakened
.
anti-trust law to make it more pro-business
C. a complete failure in curbing monopolistic practices
D. effective against monopolies but not effective against oligopolies
31. Which types of mergers have traditionally been subject to the greatest degree of scrutiny under the
Clayton Act?
A. horizontal mergers
B. vertical mergers
C. conglomerate mergers
D. product-extension mergers
32. A merger that would otherwise be banned under the Clayton Act might be permitted if:
A. one of the merging companies would fail on its own
B. one of the merging companies lacks the technology to compete effectively
C. one of the merging companies has a market share of less than 33%
D. two of the above, a and b
Business Law II Test/Chapters 47-50 Key
1.
Identify the letter of the choice that best completes the statement or answers the question.
The Department of Homeland Security:
A. has been proposed but has never been created.
B. is a non-profit organization.
C. is a Cabinet-level Department.
D. will have little effect on the federal government's organization.
Difficulty: Easy
Mallor - Chapter 47
#16
2.
Which of the following is an accurate statement about the Administrative Procedure Act?
A. It sets forth the procedure Congress must follow in order to create a new administrative agency or abolish an existing one.
B It establishes a presumption that administrative agency actions are reviewable by courts only if
. Congress has expressly made them reviewable.
C. It applies to executive and independent agencies.
D. Each of the above.
Difficulty: Medium
Mallor - Chapter 47 #18
3.
Assume that the Occupational Safety and Health Administration (OSHA) begins an investigation of Acme Company in March 2004. Further assume that Acme Company is owned by the leading Democratic Presidential candidate for the 2004 Presidential election, Jane Acme. This investigation: A. must not be undertaken solely to harass Jane Acme.
B. must be done with a warrant.
C. includes the power to subpoena witnesses, except those who are unwilling to testify.
Dincludes the power to use subpoenas duces tecum, but only if OSHA demonstrates the probable
. cause required by the Fourth Amendment for the issuance of search warrants.
Difficulty: Easy
Mallor - Chapter 47 #21
4.
Which of the following is an accurate statement about powers delegated to and possessed by administrative agencies?
A. The most important administrative agencies typically possess investigative and rulemaking powers but not adjudicatory powers.
B. An agency's rulemaking power would be classified as discretionary power rather than ministerial.
C. Modern courts have tended not to uphold the validity of broad delegations of power by Congress to administrative agencies.
DIn view of the constitutional principle of separation of powers, administrative agencies are not given
. powers typically associated with the three traditional branches of the government.
Difficulty: Medium
Mallor - Chapter 47 #22
5.
Which of the following is an accurate statement about the Privacy Act of 1974?
A It bars administrative agencies from gathering information about private citizens unless the agencies
. have obtained a court order justifying the information gathering.
B. It is frequently used by public interest groups to obtain information useful to the advancement of their public causes.
C It forbids administrative agencies from disclosing, for any purpose, the records in a file on a person
. unless that person has expressly consented to the disclosure.
D It allows persons to inspect files kept on them by administrative agencies and to request corrections
. of erroneous or incomplete information.
Difficulty: Medium
Mallor - Chapter 47 #23
6.
Most federal administrative agencies have the power to:
A. arbitrate disputes involving private parties' rights of action on subjects within the agencies' expertise. B. investigate alleged violations of the statutes they administer.
C. bring criminal prosecutions against violators of the regulations they have adopted.
D. do all of the above.
Difficulty: Easy
Mallor - Chapter 47 #24
7.
An agency's interpretive rules:
A. are not binding on businesses and the courts.
B. specify how the agency will conduct its hearings.
C. have the full force and effect of law.
D. are seldom heeded by business because of their advisory nature.
Difficulty: Medium
Mallor - Chapter 47 #26
8.
When a decision of an administrative law judge (ALJ) is subjected to de novo review,
A. it will be reviewed only for evidence of bias.
B. the ALJ's findings must be adopted by the agency's governing body unless the findings were arbitrary and capricious.
C. the ALJ's findings may be totally ignored by the agency's governing body.
D. it will be reversed unless a refusal to reverse would be arbitrary and capricious.
Difficulty: Medium
Mallor - Chapter 47 #27
9.
Which of the following constitutional checks does not apply to actions of administrative agencies?
A. The freedom of speech guarantee.
B. The due process guarantee.
C. The equal protection guarantee.
D. None of the above (i.e., each of the above is a potential check on agency actions).
Difficulty: Easy
Mallor - Chapter 47 #28
10.
The difference between executive agencies and independent agencies is that:
A. independent agency heads are appointed by Congress
B. independent agency heads serve fixed terms in office
C. executive agency heads are appointed by executives of corporations
D. executive agency heads serve at the pleasure of Congress
Difficulty: Medium
Mallor - Chapter 47 #32
11.
An administrative agency subpoena may have the power to require production of
A. witness testimony only
B. document production only
C. either document production or witness testimony but not both
D. both document production and witness testimony
Difficulty: Medium
Mallor - Chapter 47 #33
12.
Which of the following would keep the Truth in Lending Act from applying to a transaction?
A. The debtor's intent to make a commercial use of funds borrowed in the transaction.
B. The transaction's open-end credit feature.
C. The debtor's being a natural person rather than a business entity.
D. The creditor's being a credit card issuer rather than a maker of a conventional loan.
Difficulty: Medium
Mallor - Chapter 48 #17
13.
Kim is a salesperson for Bizlaw, Inc., which sells software containing legal forms to businesses. Mel,
President of Bizlaw, Inc., advises Kim not to share the Bizlaw written warranty with consumers by explaining to them that he does not carry copies of the warranty with him. Following Mel's suggestion would: A. violate the Magnuson-Moss Act.
B. would not violate the Magnuson-Moss Act if Kim actually does not carry the warranty with him.
C. would not violate the Magnuson-Moss Act because Bizlaw products are not "consumer products" within the meaning of the Act.
D. would not violate the Magnuson-Moss Act because the Act does not require sellers to give written warranties. Difficulty: Hard
Mallor - Chapter 48 #18
14.
Which of the following actions or statements by a debt collector would be least likely to violate the
Fair Debt Collection Practices Act?
A. Contacting the debtor's adult son to determine whether the debtor has the financial resources to pay the debt.
B. Telling the debtor that a failure to pay the debt would likely land the debtor in jail.
C. Repeatedly telephoning the debtor at home after she arrives home from work.
D. Telling the debtor that if she does not pay the debt, the creditor intends to sue her (an accurate statement of the creditor's intent).
Difficulty: Medium
Mallor - Chapter 48 #20
15.
Discrimination in the denial of credit does not violate the Equal Credit Opportunity Act if it was based on the applicant's
A. age.
B. marital status.
C. sexual orientation.
D. religion.
Difficulty: Medium
Mallor - Chapter 48 #22
16.
The FTC has initiated an adjudicative proceeding against Shiftico, Inc. on the theory that Shiftico made deceptive statements in advertisements designed to promote the sale of its product. In order to establish deceptiveness, the FTC must prove
A. that Shiftico's statements pertained to material matters.
B. that Shiftico intended to deceive consumers by means of its statements.
C. that some reasonable consumers actually were deceived by Shiftico's statements.
D. each of the above.
Difficulty: Medium
Mallor - Chapter 48 #24
17.
The Consumer Product Safety Commission may:
A. issue a rule banning a pesticide if the pesticide poses serious danger to the public.
B issue a product safety standard when the product in question presents an unreasonable risk of injury
. and the standard is reasonably necessary to prevent or reduce that risk.
C. sue in federal court in an effort to eliminate the dangers presented by an imminently hazardous motor vehicle.
D. do each of the above.
Difficulty: Medium
Mallor - Chapter 48 #25
18.
When the FTC brings an unfairness proceeding against a respondent,
A. the practice engaged in by the respondent may be found unfair regardless of whether it was deceptive. B. a likelihood of consumer injury will be sufficient to support a finding of unfairness if the other elements of unfairness are present.
C. the allegedly unfair act by the respondent cannot have been something other than advertising.
Dthe respondent will prevail if the harm caused by the challenged practice is not outweighed by any
. offsetting consumer or competitive benefits produced by the challenged practice.
Difficulty: Medium
Mallor - Chapter 48 #28
19.
Which of the following Federal Trade Commission issuances has/have the force of law?
A. advisory opinions
B. industry guides
C. trade regulation rules
D. all of the above
Difficulty: Medium
Mallor - Chapter 48 #31
20.
The CAN-SPAM Act of 2004 outlawed various commercial email practices. These include:
A. false information in the "from" line
B. false information in the "subject" line
C. sexually oriented material without a warning
D. all of the above
Difficulty: Medium
Mallor - Chapter 48 #35
21.
Which of the following is an example of an exclusive dealing agreement?
AA McDonald's franchisee alleged that McDonald's violated section 1 by requiring franchisees to
. lease their stores from McDonald's as a condition of acquiring a McDonald's franchise.
BAn oil company with a chain of wholly owned gas stations refuses to purchase the tires it sells in
. those stations unless the tire manufacturer seeking to supply the tires agrees to purchase, from the oil company, the petrochemicals used in the tire manufacturing process.
C. Toot Sweet, Inc., a candy manufacturer, agrees to buy all of its sugar requirements from Sure Gar,
Inc., a sugar manufacturer.
D. Two competing firms form a joint sales agency and authorize it to fix the price of their products.
Difficulty: Medium
Mallor - Chapter 49 #18
22.
Which of the following is not a violation of Section 1 of the Sherman Act?
A. Conscious parallelism by various competitors.
B. A conspiracy that unreasonably restrains trade.
C. Concerted refusals to deal with a certain business party.
D. A contract that unreasonably restrains trade.
Difficulty: Medium
Mallor - Chapter 49 #20
23.
Acme Corp. has captured 90% of the national market for commodity "X." Acme is most likely to be liable for monopolization under section 2 of the Sherman Act if "X" is:
A. felt-tip pens.
B. cellophane.
C. men's underwear.
D. yellow legal pads.
Difficulty: Hard
Mallor - Chapter 49 #23
24.
Hardware retailers Deuce Hardware Co. and Trueblue Hardware Corp. agreed to a schedule of maximum prices that they will pay to hardware wholesalers with whom they deal. Under these circumstances, which of the following statements is correct?
A Their action would be lawful if they could convince the court that any lower prices produced by
. their agreement would be passed on to consumers.
B. Their action is lawful because only sellers can be guilty of price-fixing.
C Their action would be lawful if they could convince a court that they lacked sufficient market power
. to force wholesalers to reduce their prices in response to their agreement.
D. Their action is per se unlawful.
Difficulty: Hard
Mallor - Chapter 49 #25
25.
Nevco, Inc. has cornered 85% of the widget market in the southwestern states. Nevco is least likely to be liable for monopolization under section 2 of the Sherman Act if:
A. its share of the national widget market is only 35%.
B it acquired its market share by offering vastly superior products at competitive prices, but preserved
. it by using local below-cost pricing to drive out would-be competitors.
Cit acquired its market share solely due to a great decline in the popularity of widgets in the
. southwestern states--a decline that caused most other firms to cease selling widgets in that region of the country.
D it acquired its market share by ruthlessly underselling its competitors and using other illegal
. practices, but charged fair prices after acquiring monopoly power.
Difficulty: Medium
Mallor - Chapter 49 #27
26.
If a plaintiff proves that it has suffered a direct injury by another company in violation of the Sherman
Act, it is entitled to recover:
A. only the amount of loss it suffered as a result of the violation
B. only two times the amount of loss it suffered as a result of the violation
C. only three times the amount of loss it suffered as a result of the violation
D. three times the amount of loss it suffered as a result of the violation, plus reasonable attorneys' fees
Difficulty: Easy
Mallor - Chapter 49 #33
27.
In an anti-trust case alleging illegal tying, what must the plaintiff prove?
A. the tying product and the tied product are two separate products
B. a "not insubstantial" amount of commerce in the tied product is affected
C. the defendant company has substantial market power in the tied product
D. two of the above are correct, a and b
Difficulty: Hard
Mallor - Chapter 49 #36
28.
Which of the following is not an element of a plaintiff's claim that a tying arrangement violated the
Clayton Act?
A. Proof that the sale of the tying product was conditioned on an accompanying sale of the tied product. B. Proof that the seller has substantial market power in the market for the tied product.
C. Proof that the seller's tying arrangements restrained a "not insubstantial" volume of commerce in the tied product.
D. None of the above (i.e., each of the above is an element of the claim).
Difficulty: Medium
Mallor - Chapter 50 #19
29.
Vertical mergers:
A. are those mergers that take place between formerly competing firms.
B. do not directly result in an increase in concentration but may threaten competition in various ways.
C. automatically violate Clayton Act Section 7 because of their inherently anticompetitive nature.
Dmay produce economic efficiencies, but efficiency arguments are less favorably viewed by the
. Justice Department in vertical merger situations than in horizontal merger cases.
Difficulty: Medium
Mallor - Chapter 50 #25
30.
Congress passed the Clayton Act in 1914 because the Sherman Act of 1890 had been:
A. less effective than had been expected in curbing monopolistic practices, so the Clayton Act strengthened anti-trust law
B more effective than had been expected in curbing monopolistic practices, so the Clayton Act
. weakened anti-trust law to make it more pro-business
C. a complete failure in curbing monopolistic practices
D. effective against monopolies but not effective against oligopolies
Difficulty: Medium
Mallor - Chapter 50 #31
31.
Which types of mergers have traditionally been subject to the greatest degree of scrutiny under the
Clayton Act?
A. horizontal mergers
B. vertical mergers
C. conglomerate mergers
D. product-extension mergers
Difficulty: Easy
Mallor - Chapter 50 #34
32.
A merger that would otherwise be banned under the Clayton Act might be permitted if:
A. one of the merging companies would fail on its own
B. one of the merging companies lacks the technology to compete effectively
C. one of the merging companies has a market share of less than 33%
D. two of the above, a and b
Difficulty: Medium
Mallor - Chapter 50 #35
Business Law II Test/Chapters 47-50 Summary
Category
Difficulty: Easy
Difficulty: Hard
Difficulty: Medium
Mallor - Chapter 47
Mallor - Chapter 48
Mallor - Chapter 49
Mallor - Chapter 50
# of Questions
6
4
22
11
9
7
5
Student: ___________________________________________________________________________
1.
Identify the letter of the choice that best completes the statement or answers the question.
The Department of Homeland Security:
A. has been proposed but has never been created.
B. is a non-profit organization.
C. is a Cabinet-level Department.
D. will have little effect on the federal government's organization.
2.
Which of the following is an accurate statement about the Administrative Procedure Act?
A. It sets forth the procedure Congress must follow in order to create a new administrative agency or abolish an existing one.
B It establishes a presumption that administrative agency actions are reviewable by courts only if
. …show more content…
Congress has expressly made them reviewable.
C. It applies to executive and independent agencies.
D. Each of the above.
3.
Assume that the Occupational Safety and Health Administration (OSHA) begins an investigation of Acme Company in March 2004. Further assume that Acme Company is owned by the leading
Democratic Presidential candidate for the 2004 Presidential election, Jane Acme. This investigation:
A. must not be undertaken solely to harass Jane Acme.
B. must be done with a warrant.
C. includes the power to subpoena witnesses, except those who are unwilling to testify.
Dincludes the power to use subpoenas duces tecum, but only if OSHA demonstrates the probable cause
. required by the Fourth Amendment for the issuance of search warrants.
4.
Which of the following is an accurate statement about powers delegated to and possessed by administrative agencies?
A.The most important administrative agencies typically possess investigative and rulemaking powers but not adjudicatory powers.
B. An agency's rulemaking power would be classified as discretionary power rather than ministerial.
C. Modern courts have tended not to uphold the validity of broad delegations of power by Congress to administrative agencies.
DIn view of the constitutional principle of separation of powers, administrative agencies are not given
. powers typically associated with the three traditional branches of the government.
5.
Which of the following is an accurate statement about the Privacy Act of 1974?
A It bars administrative agencies from gathering information about private citizens unless the agencies
. have obtained a court order justifying the information gathering.
B. It is frequently used by public interest groups to obtain information useful to the advancement of their public causes.
C It forbids administrative agencies from disclosing, for any purpose, the records in a file on a person
. unless that person has expressly consented to the disclosure.
D It allows persons to inspect files kept on them by administrative agencies and to request corrections of
. erroneous or incomplete information.
6.
Most federal administrative agencies have the power to:
A. arbitrate disputes involving private parties' rights of action on subjects within the agencies' expertise.
B. investigate alleged violations of the statutes they administer.
C. bring criminal prosecutions against violators of the regulations they have adopted.
D. do all of the above.
7.
An agency's interpretive rules:
A. are not binding on businesses and the courts.
B. specify how the agency will conduct its hearings.
C. have the full force and effect of law.
D. are seldom heeded by business because of their advisory nature.
8.
When a decision of an administrative law judge (ALJ) is subjected to de novo review,
A. it will be reviewed only for evidence of bias.
B. the ALJ's findings must be adopted by the agency's governing body unless the findings were arbitrary and capricious.
C. the ALJ's findings may be totally ignored by the agency's governing body.
D. it will be reversed unless a refusal to reverse would be arbitrary and capricious.
9.
Which of the following constitutional checks does not apply to actions of administrative agencies?
A. The freedom of speech guarantee.
B. The due process guarantee.
C. The equal protection guarantee.
D. None of the above (i.e., each of the above is a potential check on agency actions).
10. The difference between executive agencies and independent agencies is that:
A. independent agency heads are appointed by Congress
B. independent agency heads serve fixed terms in office
C. executive agency heads are appointed by executives of corporations
D. executive agency heads serve at the pleasure of Congress
11. An administrative agency subpoena may have the power to require production of
A. witness testimony only
B. document production only
C. either document production or witness testimony but not both
D. both document production and witness testimony
12. Which of the following would keep the Truth in Lending Act from applying to a transaction?
A. The debtor's intent to make a commercial use of funds borrowed in the transaction.
B. The transaction's open-end credit feature.
C. The debtor's being a natural person rather than a business entity.
D. The creditor's being a credit card issuer rather than a maker of a conventional loan.
13. Kim is a salesperson for Bizlaw, Inc., which sells software containing legal forms to businesses. Mel,
President of Bizlaw, Inc., advises Kim not to share the Bizlaw written warranty with consumers by explaining to them that he does not carry copies of the warranty with him. Following Mel's suggestion would: A. violate the Magnuson-Moss Act.
B. would not violate the Magnuson-Moss Act if Kim actually does not carry the warranty with him.
C.would not violate the Magnuson-Moss Act because Bizlaw products are not "consumer products" within the meaning of the Act.
D. would not violate the Magnuson-Moss Act because the Act does not require sellers to give written warranties. 14. Which of the following actions or statements by a debt collector would be least likely to violate the Fair
Debt Collection Practices Act?
A. Contacting the debtor's adult son to determine whether the debtor has the financial resources to pay the debt. B. Telling the debtor that a failure to pay the debt would likely land the debtor in jail.
C. Repeatedly telephoning the debtor at home after she arrives home from work.
D.Telling the debtor that if she does not pay the debt, the creditor intends to sue her (an accurate statement of the creditor's intent).
15. Discrimination in the denial of credit does not violate the Equal Credit Opportunity Act if it was based on the applicant's
A. age.
B. marital status.
C. sexual orientation.
D. religion.
16. The FTC has initiated an adjudicative proceeding against Shiftico, Inc. on the theory that Shiftico made deceptive statements in advertisements designed to promote the sale of its product. In order to establish deceptiveness, the FTC must prove
A. that Shiftico's statements pertained to material matters.
B. that Shiftico intended to deceive consumers by means of its statements.
C. that some reasonable consumers actually were deceived by Shiftico's statements.
D. each of the above.
17. The Consumer Product Safety Commission may:
A. issue a rule banning a pesticide if the pesticide poses serious danger to the public.
B issue a product safety standard when the product in question presents an unreasonable risk of injury and
. the standard is reasonably necessary to prevent or reduce that risk.
C. sue in federal court in an effort to eliminate the dangers presented by an imminently hazardous motor vehicle. D. do each of the above.
18. When the FTC brings an unfairness proceeding against a respondent,
A. the practice engaged in by the respondent may be found unfair regardless of whether it was deceptive.
B.a likelihood of consumer injury will be sufficient to support a finding of unfairness if the other elements of unfairness are present.
C. the allegedly unfair act by the respondent cannot have been something other than advertising.
Dthe respondent will prevail if the harm caused by the challenged practice is not outweighed by any
. offsetting consumer or competitive benefits produced by the challenged practice.
19. Which of the following Federal Trade Commission issuances has/have the force of law?
A. advisory opinions
B. industry guides
C. trade regulation rules
D. all of the above
20. The CAN-SPAM Act of 2004 outlawed various commercial email practices. These include:
A. false information in the "from" line
B. false information in the "subject" line
C. sexually oriented material without a warning
D. all of the above
21. Which of the following is an example of an exclusive dealing agreement?
AA McDonald's franchisee alleged that McDonald's violated section 1 by requiring franchisees to lease
. their stores from McDonald's as a condition of acquiring a McDonald's franchise.
BAn oil company with a chain of wholly owned gas stations refuses to purchase the tires it sells in
. those stations unless the tire manufacturer seeking to supply the tires agrees to purchase, from the oil company, the petrochemicals used in the tire manufacturing process.
C. Toot Sweet, Inc., a candy manufacturer, agrees to buy all of its sugar requirements from Sure Gar, Inc., a sugar manufacturer.
D. Two competing firms form a joint sales agency and authorize it to fix the price of their products.
22. Which of the following is not a violation of Section 1 of the Sherman Act?
A. Conscious parallelism by various competitors.
B. A conspiracy that unreasonably restrains trade.
C. Concerted refusals to deal with a certain business party.
D. A contract that unreasonably restrains trade.
23. Acme Corp. has captured 90% of the national market for commodity "X." Acme is most likely to be liable for monopolization under section 2 of the Sherman Act if "X" is:
A. felt-tip pens.
B. cellophane.
C. men's underwear.
D. yellow legal pads.
24. Hardware retailers Deuce Hardware Co. and Trueblue Hardware Corp. agreed to a schedule of maximum prices that they will pay to hardware wholesalers with whom they deal. Under these circumstances, which of the following statements is correct?
A Their action would be lawful if they could convince the court that any lower prices produced by their
. agreement would be passed on to consumers.
B. Their action is lawful because only sellers can be guilty of price-fixing.
C Their action would be lawful if they could convince a court that they lacked sufficient market power to
. force wholesalers to reduce their prices in response to their agreement.
D. Their action is per se unlawful.
25. Nevco, Inc. has cornered 85% of the widget market in the southwestern states. Nevco is least likely to be liable for monopolization under section 2 of the Sherman Act if:
A. its share of the national widget market is only 35%.
B it acquired its market share by offering vastly superior products at competitive prices, but preserved it
. by using local below-cost pricing to drive out would-be competitors.
Cit acquired its market share solely due to a great decline in the popularity of widgets in the southwestern
. states--a decline that caused most other firms to cease selling widgets in that region of the country.
D it acquired its market share by ruthlessly underselling its competitors and using other illegal practices,
. but charged fair prices after acquiring monopoly power.
26. If a plaintiff proves that it has suffered a direct injury by another company in violation of the Sherman
Act, it is entitled to recover:
A. only the amount of loss it suffered as a result of the violation
B. only two times the amount of loss it suffered as a result of the violation
C. only three times the amount of loss it suffered as a result of the violation
D. three times the amount of loss it suffered as a result of the violation, plus reasonable attorneys' fees
27. In an anti-trust case alleging illegal tying, what must the plaintiff prove?
A. the tying product and the tied product are two separate products
B. a "not insubstantial" amount of commerce in the tied product is affected
C. the defendant company has substantial market power in the tied product
D. two of the above are correct, a and b
28. Which of the following is not an element of a plaintiff's claim that a tying arrangement violated the
Clayton Act?
A. Proof that the sale of the tying product was conditioned on an accompanying sale of the tied product.
B. Proof that the seller has substantial market power in the market for the tied product.
C. Proof that the seller's tying arrangements restrained a "not insubstantial" volume of commerce in the tied product.
D. None of the above (i.e., each of the above is an element of the claim).
29. Vertical mergers:
A. are those mergers that take place between formerly competing firms.
B. do not directly result in an increase in concentration but may threaten competition in various ways.
C. automatically violate Clayton Act Section 7 because of their inherently anticompetitive nature.
Dmay produce economic efficiencies, but efficiency arguments are less favorably viewed by the Justice
. Department in vertical merger situations than in horizontal merger cases.
30. Congress passed the Clayton Act in 1914 because the Sherman Act of 1890 had been:
A. less effective than had been expected in curbing monopolistic practices, so the Clayton Act strengthened anti-trust law
B more effective than had been expected in curbing monopolistic practices, so the Clayton Act weakened
.
anti-trust law to make it more pro-business
C. a complete failure in curbing monopolistic practices
D. effective against monopolies but not effective against oligopolies
31. Which types of mergers have traditionally been subject to the greatest degree of scrutiny under the
Clayton Act?
A. horizontal mergers
B. vertical mergers
C. conglomerate mergers
D. product-extension mergers
32. A merger that would otherwise be banned under the Clayton Act might be permitted if:
A. one of the merging companies would fail on its own
B. one of the merging companies lacks the technology to compete effectively
C. one of the merging companies has a market share of less than 33%
D. two of the above, a and b
Business Law II Test/Chapters 47-50 Key
1.
Identify the letter of the choice that best completes the statement or answers the question.
The Department of Homeland Security:
A. has been proposed but has never been created.
B. is a non-profit organization.
C. is a Cabinet-level Department.
D. will have little effect on the federal government's organization.
Difficulty: Easy
Mallor - Chapter 47
#16
2.
Which of the following is an accurate statement about the Administrative Procedure Act?
A. It sets forth the procedure Congress must follow in order to create a new administrative agency or abolish an existing one.
B It establishes a presumption that administrative agency actions are reviewable by courts only if
. Congress has expressly made them reviewable.
C. It applies to executive and independent agencies.
D. Each of the above.
Difficulty: Medium
Mallor - Chapter 47 #18
3.
Assume that the Occupational Safety and Health Administration (OSHA) begins an investigation of Acme Company in March 2004. Further assume that Acme Company is owned by the leading Democratic Presidential candidate for the 2004 Presidential election, Jane Acme. This investigation: A. must not be undertaken solely to harass Jane Acme.
B. must be done with a warrant.
C. includes the power to subpoena witnesses, except those who are unwilling to testify.
Dincludes the power to use subpoenas duces tecum, but only if OSHA demonstrates the probable
. cause required by the Fourth Amendment for the issuance of search warrants.
Difficulty: Easy
Mallor - Chapter 47 #21
4.
Which of the following is an accurate statement about powers delegated to and possessed by administrative agencies?
A. The most important administrative agencies typically possess investigative and rulemaking powers but not adjudicatory powers.
B. An agency's rulemaking power would be classified as discretionary power rather than ministerial.
C. Modern courts have tended not to uphold the validity of broad delegations of power by Congress to administrative agencies.
DIn view of the constitutional principle of separation of powers, administrative agencies are not given
. powers typically associated with the three traditional branches of the government.
Difficulty: Medium
Mallor - Chapter 47 #22
5.
Which of the following is an accurate statement about the Privacy Act of 1974?
A It bars administrative agencies from gathering information about private citizens unless the agencies
. have obtained a court order justifying the information gathering.
B. It is frequently used by public interest groups to obtain information useful to the advancement of their public causes.
C It forbids administrative agencies from disclosing, for any purpose, the records in a file on a person
. unless that person has expressly consented to the disclosure.
D It allows persons to inspect files kept on them by administrative agencies and to request corrections
. of erroneous or incomplete information.
Difficulty: Medium
Mallor - Chapter 47 #23
6.
Most federal administrative agencies have the power to:
A. arbitrate disputes involving private parties' rights of action on subjects within the agencies' expertise. B. investigate alleged violations of the statutes they administer.
C. bring criminal prosecutions against violators of the regulations they have adopted.
D. do all of the above.
Difficulty: Easy
Mallor - Chapter 47 #24
7.
An agency's interpretive rules:
A. are not binding on businesses and the courts.
B. specify how the agency will conduct its hearings.
C. have the full force and effect of law.
D. are seldom heeded by business because of their advisory nature.
Difficulty: Medium
Mallor - Chapter 47 #26
8.
When a decision of an administrative law judge (ALJ) is subjected to de novo review,
A. it will be reviewed only for evidence of bias.
B. the ALJ's findings must be adopted by the agency's governing body unless the findings were arbitrary and capricious.
C. the ALJ's findings may be totally ignored by the agency's governing body.
D. it will be reversed unless a refusal to reverse would be arbitrary and capricious.
Difficulty: Medium
Mallor - Chapter 47 #27
9.
Which of the following constitutional checks does not apply to actions of administrative agencies?
A. The freedom of speech guarantee.
B. The due process guarantee.
C. The equal protection guarantee.
D. None of the above (i.e., each of the above is a potential check on agency actions).
Difficulty: Easy
Mallor - Chapter 47 #28
10.
The difference between executive agencies and independent agencies is that:
A. independent agency heads are appointed by Congress
B. independent agency heads serve fixed terms in office
C. executive agency heads are appointed by executives of corporations
D. executive agency heads serve at the pleasure of Congress
Difficulty: Medium
Mallor - Chapter 47 #32
11.
An administrative agency subpoena may have the power to require production of
A. witness testimony only
B. document production only
C. either document production or witness testimony but not both
D. both document production and witness testimony
Difficulty: Medium
Mallor - Chapter 47 #33
12.
Which of the following would keep the Truth in Lending Act from applying to a transaction?
A. The debtor's intent to make a commercial use of funds borrowed in the transaction.
B. The transaction's open-end credit feature.
C. The debtor's being a natural person rather than a business entity.
D. The creditor's being a credit card issuer rather than a maker of a conventional loan.
Difficulty: Medium
Mallor - Chapter 48 #17
13.
Kim is a salesperson for Bizlaw, Inc., which sells software containing legal forms to businesses. Mel,
President of Bizlaw, Inc., advises Kim not to share the Bizlaw written warranty with consumers by explaining to them that he does not carry copies of the warranty with him. Following Mel's suggestion would: A. violate the Magnuson-Moss Act.
B. would not violate the Magnuson-Moss Act if Kim actually does not carry the warranty with him.
C. would not violate the Magnuson-Moss Act because Bizlaw products are not "consumer products" within the meaning of the Act.
D. would not violate the Magnuson-Moss Act because the Act does not require sellers to give written warranties. Difficulty: Hard
Mallor - Chapter 48 #18
14.
Which of the following actions or statements by a debt collector would be least likely to violate the
Fair Debt Collection Practices Act?
A. Contacting the debtor's adult son to determine whether the debtor has the financial resources to pay the debt.
B. Telling the debtor that a failure to pay the debt would likely land the debtor in jail.
C. Repeatedly telephoning the debtor at home after she arrives home from work.
D. Telling the debtor that if she does not pay the debt, the creditor intends to sue her (an accurate statement of the creditor's intent).
Difficulty: Medium
Mallor - Chapter 48 #20
15.
Discrimination in the denial of credit does not violate the Equal Credit Opportunity Act if it was based on the applicant's
A. age.
B. marital status.
C. sexual orientation.
D. religion.
Difficulty: Medium
Mallor - Chapter 48 #22
16.
The FTC has initiated an adjudicative proceeding against Shiftico, Inc. on the theory that Shiftico made deceptive statements in advertisements designed to promote the sale of its product. In order to establish deceptiveness, the FTC must prove
A. that Shiftico's statements pertained to material matters.
B. that Shiftico intended to deceive consumers by means of its statements.
C. that some reasonable consumers actually were deceived by Shiftico's statements.
D. each of the above.
Difficulty: Medium
Mallor - Chapter 48 #24
17.
The Consumer Product Safety Commission may:
A. issue a rule banning a pesticide if the pesticide poses serious danger to the public.
B issue a product safety standard when the product in question presents an unreasonable risk of injury
. and the standard is reasonably necessary to prevent or reduce that risk.
C. sue in federal court in an effort to eliminate the dangers presented by an imminently hazardous motor vehicle.
D. do each of the above.
Difficulty: Medium
Mallor - Chapter 48 #25
18.
When the FTC brings an unfairness proceeding against a respondent,
A. the practice engaged in by the respondent may be found unfair regardless of whether it was deceptive. B. a likelihood of consumer injury will be sufficient to support a finding of unfairness if the other elements of unfairness are present.
C. the allegedly unfair act by the respondent cannot have been something other than advertising.
Dthe respondent will prevail if the harm caused by the challenged practice is not outweighed by any
. offsetting consumer or competitive benefits produced by the challenged practice.
Difficulty: Medium
Mallor - Chapter 48 #28
19.
Which of the following Federal Trade Commission issuances has/have the force of law?
A. advisory opinions
B. industry guides
C. trade regulation rules
D. all of the above
Difficulty: Medium
Mallor - Chapter 48 #31
20.
The CAN-SPAM Act of 2004 outlawed various commercial email practices. These include:
A. false information in the "from" line
B. false information in the "subject" line
C. sexually oriented material without a warning
D. all of the above
Difficulty: Medium
Mallor - Chapter 48 #35
21.
Which of the following is an example of an exclusive dealing agreement?
AA McDonald's franchisee alleged that McDonald's violated section 1 by requiring franchisees to
. lease their stores from McDonald's as a condition of acquiring a McDonald's franchise.
BAn oil company with a chain of wholly owned gas stations refuses to purchase the tires it sells in
. those stations unless the tire manufacturer seeking to supply the tires agrees to purchase, from the oil company, the petrochemicals used in the tire manufacturing process.
C. Toot Sweet, Inc., a candy manufacturer, agrees to buy all of its sugar requirements from Sure Gar,
Inc., a sugar manufacturer.
D. Two competing firms form a joint sales agency and authorize it to fix the price of their products.
Difficulty: Medium
Mallor - Chapter 49 #18
22.
Which of the following is not a violation of Section 1 of the Sherman Act?
A. Conscious parallelism by various competitors.
B. A conspiracy that unreasonably restrains trade.
C. Concerted refusals to deal with a certain business party.
D. A contract that unreasonably restrains trade.
Difficulty: Medium
Mallor - Chapter 49 #20
23.
Acme Corp. has captured 90% of the national market for commodity "X." Acme is most likely to be liable for monopolization under section 2 of the Sherman Act if "X" is:
A. felt-tip pens.
B. cellophane.
C. men's underwear.
D. yellow legal pads.
Difficulty: Hard
Mallor - Chapter 49 #23
24.
Hardware retailers Deuce Hardware Co. and Trueblue Hardware Corp. agreed to a schedule of maximum prices that they will pay to hardware wholesalers with whom they deal. Under these circumstances, which of the following statements is correct?
A Their action would be lawful if they could convince the court that any lower prices produced by
. their agreement would be passed on to consumers.
B. Their action is lawful because only sellers can be guilty of price-fixing.
C Their action would be lawful if they could convince a court that they lacked sufficient market power
. to force wholesalers to reduce their prices in response to their agreement.
D. Their action is per se unlawful.
Difficulty: Hard
Mallor - Chapter 49 #25
25.
Nevco, Inc. has cornered 85% of the widget market in the southwestern states. Nevco is least likely to be liable for monopolization under section 2 of the Sherman Act if:
A. its share of the national widget market is only 35%.
B it acquired its market share by offering vastly superior products at competitive prices, but preserved
. it by using local below-cost pricing to drive out would-be competitors.
Cit acquired its market share solely due to a great decline in the popularity of widgets in the
. southwestern states--a decline that caused most other firms to cease selling widgets in that region of the country.
D it acquired its market share by ruthlessly underselling its competitors and using other illegal
. practices, but charged fair prices after acquiring monopoly power.
Difficulty: Medium
Mallor - Chapter 49 #27
26.
If a plaintiff proves that it has suffered a direct injury by another company in violation of the Sherman
Act, it is entitled to recover:
A. only the amount of loss it suffered as a result of the violation
B. only two times the amount of loss it suffered as a result of the violation
C. only three times the amount of loss it suffered as a result of the violation
D. three times the amount of loss it suffered as a result of the violation, plus reasonable attorneys' fees
Difficulty: Easy
Mallor - Chapter 49 #33
27.
In an anti-trust case alleging illegal tying, what must the plaintiff prove?
A. the tying product and the tied product are two separate products
B. a "not insubstantial" amount of commerce in the tied product is affected
C. the defendant company has substantial market power in the tied product
D. two of the above are correct, a and b
Difficulty: Hard
Mallor - Chapter 49 #36
28.
Which of the following is not an element of a plaintiff's claim that a tying arrangement violated the
Clayton Act?
A. Proof that the sale of the tying product was conditioned on an accompanying sale of the tied product. B. Proof that the seller has substantial market power in the market for the tied product.
C. Proof that the seller's tying arrangements restrained a "not insubstantial" volume of commerce in the tied product.
D. None of the above (i.e., each of the above is an element of the claim).
Difficulty: Medium
Mallor - Chapter 50 #19
29.
Vertical mergers:
A. are those mergers that take place between formerly competing firms.
B. do not directly result in an increase in concentration but may threaten competition in various ways.
C. automatically violate Clayton Act Section 7 because of their inherently anticompetitive nature.
Dmay produce economic efficiencies, but efficiency arguments are less favorably viewed by the
. Justice Department in vertical merger situations than in horizontal merger cases.
Difficulty: Medium
Mallor - Chapter 50 #25
30.
Congress passed the Clayton Act in 1914 because the Sherman Act of 1890 had been:
A. less effective than had been expected in curbing monopolistic practices, so the Clayton Act strengthened anti-trust law
B more effective than had been expected in curbing monopolistic practices, so the Clayton Act
. weakened anti-trust law to make it more pro-business
C. a complete failure in curbing monopolistic practices
D. effective against monopolies but not effective against oligopolies
Difficulty: Medium
Mallor - Chapter 50 #31
31.
Which types of mergers have traditionally been subject to the greatest degree of scrutiny under the
Clayton Act?
A. horizontal mergers
B. vertical mergers
C. conglomerate mergers
D. product-extension mergers
Difficulty: Easy
Mallor - Chapter 50 #34
32.
A merger that would otherwise be banned under the Clayton Act might be permitted if:
A. one of the merging companies would fail on its own
B. one of the merging companies lacks the technology to compete effectively
C. one of the merging companies has a market share of less than 33%
D. two of the above, a and b
Difficulty: Medium
Mallor - Chapter 50 #35
Business Law II Test/Chapters 47-50 Summary
Category
Difficulty: Easy
Difficulty: Hard
Difficulty: Medium
Mallor - Chapter 47
Mallor - Chapter 48
Mallor - Chapter 49
Mallor - Chapter 50
# of Questions
6
4
22
11
9
7
5