QUESTION 1

The commerce clause has hadnogreater impact on business than any other provision in the Constitution.

1. True
2. False

QUESTION 2

Both parties to an agency relationship have thepowerand therightto terminate the relationship at any time.

1. True
2. False

QUESTION 3

Compliance with the law is not always sufficient to determine "right" behavior because

a.ethical problems occur in business.

b.business decisions can have negative impacts.

c.company codes are also sources of law.

d.the law does not codify all ethical requirements.

QUESTION 4

The Franchise Rule requires a franchisor to provide potential earnings figures to its prospective franchisees.

1. True
2. False

QUESTION 5

A benefit corporation is designed to make a profit and thereby provide long-term shareholder benefit.

1. True
2. False

QUESTION 6

The commerce clause has never been held to support the federal regulation of noncommercial activities that take place wholly within a state's borders.

1. True
2. False

QUESTION 7

Vera is a purchasing agent for Wild-Caught Fish Inc., with the authority to buy a sea fisher's catch up to a certain quantity. After the fish is bought, the agency relationship terminates

a.following published notice.

b.following notice to all fishers with whom Vera did business.

c.automatically.

d.following notice to all fishers within a reasonable geographic area.

QUESTION 8

Maeve sells New Energy, a sole proprietorship that makes and sells solar panels, to Omar. This is

a.the creation of a partnership.

b.none of the choicesa sole proprietorship cannot be sold.

c.the establishment of a franchise.

d.a transfer of the ownership of the business.

QUESTION 9

The Fraud Reduction and Data Analytics Act to prevent, detect, and respond to fraud in federal programs institutionalizes

a.federal programs.

b.corporate policy.

c.fraud.

d.ethical rights and duties.

QUESTION 10

Dain is a limited partner in Eco Baits, a pest control service organized as a limited partnership, which cannot pay its debts. Dain is liable for the debts

a.to the full extent.

b.to the extent of his capital contribution to the firm.

c.to no extent.

d.in proportion to the number of partners in the firm.

QUESTION 11

Bread Company hires Craig to sell the company's products in a certain area. Bread agrees to pay Craig a salary, plus commission, for a trial period. They also agree that he can sell using any methods and during any hours that seem appropriate. The key factor in whether Craig is Bread's employee is

a.the amount of the salary.

b.the length of the trial period.

c.the size of the sales area.

d.the degree of the employer's control over the details of the work.

QUESTION 12

To participate in a shareholders' meeting, a shareholder must present a proxy.

1. True
2. False

QUESTION 13

Cynthia is the chief financial officer of Digital Corporation. In that capacity, when she is unsure whether a certain business action is legal, she should act

a.honestly and responsibly.

b.in the short-run interest of Digital.

c.to maximize profit.

d.in her own best interest.

QUESTION 14

The members of a limited liability company have considerable flexibility in managing the business of the firm.

1. True
2. False

QUESTION 15

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

a.is relieved of its responsibility.

b.retains its responsibility.

c.was never responsible.

d.shares the responsibility.