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LAW 531T Week 2 Practice Assignment (100 % Correct)
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LAW 531T Week 2 Practice Assignment (100 % Correct)

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1. True or false: Some small businesses may issue stocks to employees instead of compensation when money is tight. • • Which of the following is not true of corporations? • Directors will not be subject to lawsuit from shareholders as long as they act in a reasonable and prudent way. • Executives are not subject to the same duty of care in carrying out the corporation's purposes as the board of directors. • The board of directors hires executives of a corporation. • Executives carry out the day-to-day operations of the corporation. • True or false: In a franchise agreement, the franchisor and the franchisee are separate legal entities. • • Which of the following is not true of general partnerships? • Partners share profits and losses according to the partnership agreement. • Partners have an equal right to engage in the management of the business. • Partners have joint ownership of business assets. • Partners must always agree to split the profits and losses evenly. • Corporations created to assist doctors, lawyers, accountants, and so on are known as _________________ corporations. • not-for-profit • closely held • alien • professional • True or false: Profits and losses from an LLC must be distributed in the same proportion to all members. • • Which of the following is true of general and limited partners in a limited partnership? • Limited partners are not liable for partnership debts. • General and limited partners are jointly responsible for partnership debt. • General partners are not liable for partnership debts. • General partners are required to invest capital and refrain from managing the business. • Which of the following is not true of a business operating under sole proprietorship? • A sole proprietor pays only personal taxes. • No government approval is required to set up a sole proprietorship. • A sole proprietorship is considered a separate legal entity. • If the owner dies, the business usually dies as well. • An administrative agency is prohibited from doing all but which of the following? • violating judicial decisions • exercising legislative power • extending beyond its authority • making arbitrary laws • Which of the following is true of administrative agencies? • All administrative agencies answer directly to the president. • Administrative agencies may overrule judicial decisions. • An existing administrative agency may not create a new law. • Each state and local government has administrative agencies. • _________________ establishes the protocol that must be followed by an administrative agency while enforcing a(n) _________________. • Substantive law; interpretive law • Procedural law; substantive law • Interpretive law; substantive law • Substantive law; procedural law • True or false: Production cost may be used as a defense against a company accused of price discrimination. • • The act of controlling prices for goods and services is known as _________________. • controlling output • regulating competitive practices • price fixing • dividing markets • An agreement to refuse to deal with another business is known as a _________________. • split • division • boycott • control • Which of the following is not a prerequisite to be considered a failing company prior to entering a merger? • No other buyer is available to rescue the company. • Its assets would evaporate but for a merger. • Too much competition exists in a particular geographical area. • There is no other reasonable alternative. • Which of the following is a legitimate defense against a claim of exercise of monopoly power? • The business acquired the monopoly innocently as an unintended consequence of another purpose. • The business owns 25 percent of the geographical market. • The business owns 75 percent of the product market. • The business engaged in a tying arrangement with another business. • One business having almost all of one product type or service within a geographical area is known as _________________ power. • vertical • consolidated • monopoly • horizontal • True or false: The calculation of monopoly power rests squarely on a firm’s percentage of dominance in the relevant market. 18. 19. 20. The U.S. Supreme Court has developed two tests for determining the lawfulness of an agreement: the per se rule and the _________________. o rule of trust o rule of law o rule of reason o rule of competition 21. In a(n) _________________, the distributor requires the purchaser of another product to buy another associated product. o tying arrangement o geographic allocation agreement o exclusive dealing agreement o price maintenance agreement

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