Exam 2

Question 1

Larry decided to relocate to Germany. Larry hired Happy Homes, Inc. to find a buyer and contract for the sale of his house in the U.S. The agency relationship between Larry and Happy Homes must be evidenced with a written agreement.

Answer 1

True

Question 2

If Denise is hired to work as a cashier, she has the implied authority to do acts reasonably necessary to carry out her job.

Answer 2

True

Question 3

Erica’s supervisor told her to arrange for a conference room at the Kelly Inn. Erica has express authority to contract for the room.

Answer 3

True

Question 4

An agent must obey all instructions of the principal.

Answer 4

False

Question 5

Jolene hired Lacy to find a buyer for her house. Adam was interested in buying the house. If both Jolene and Adam agree, Lacy, a real estate agent, may represent both parties.

Answer 5

True

Question 6

As a general rule, an agent is liable on contracts entered into on behalf of a fully disclosed principal.

Answer 6

False

Question 7

You cannot be held liable for the actions of your agents if the agents are violating your instructions.

Answer 7

False

Question 8

If apparent authority is present, the principal is liable for even the unauthorized acts of the agent.

Answer 8

True

Question 9

The death of an agent automatically terminates an agency relationship.

Answer 9

True

Question 10

Generally, either party to an agency relationship has the power to terminate it at any time.

Answer 10

True

Question 11

Rob agrees to act as an agent for Diane in selling her car. Diane has a duty of loyalty to Rob.

Answer 11

False

Question 12

Kaiya is a sales representative of TriColor. Kaiya owes a fiduciary duty to TriColor.

Answer 12

True

Question 13

A principal must indemnify an agent for any expenses incurred in carrying out agency responsibilities, but the principal will not be responsible for indemnifying an agent for any expenses not expressly authorized.

Answer 13

False

Question 14

An agent cannot disclose nor use for their own benefit any information they learn during the agency

Answer 14

True

Question 15

An agent is always liable for his or her own torts committed within the scope of the agency relationship.

Answer 15

True

Question 16

A fundamental aim of the National Labor Relations Act is the establishment of industrial peace and the preservation of the flow of commerce.

Answer 16

True

Question 17

The five members of the National Labor Relations Board are appointed by the President.

Answer 17

True

Question 18

The NLRB guarantees the employees the right to talk among themselves about forming a union.

Answer 18

True

Question 19

The National Labor Relations Act guarantees employees the right to join unions.

Answer 19

True

Question 20

Union members earn, on average, $200 more per week than non-union members.

Answer 20

True

Question 21

The NLRA requires the union and the employer to reach an agreement through good-faith collective bargaining.

Answer 21

False

Question 22

Valley Mart told its employees that they would be fired if they actively supported a unionizing effort. Valley Mart has committed an unfair labor practice.

Answer 22

True

Question 23

If employees wish to organize a union, the employer is prohibited from distributing written notices to employees stating it is opposed to union activity within the company.

Answer 23

False

Question 24

At one point in American history, American courts regarded any coordinated effort by workers as a criminal conspiracy, and courts convicted workers merely for the act of joining together, even if no strike took place.

Answer 24

True

Question 25

Management is entitled to tell the employees that it is opposed to a union and why.

Answer 25

True

Question 26

The management of Northeastern Manufacturing may not close one of its manufacturing plants without bargaining that issue with the union if its workers are represented by a collective bargaining unit.

Answer 26

True

Question 27

A union shop means the employer can hire anyone they choose but once hired an employee must join a union.

Answer 27

True

Question 28

The union representing workers at Blue Ridge Co. were unable to reach a collective bargaining agreement with management. The union may legally stage a strike in which members stop working but remain at their job posts, physically blocking replacement workers from taking their places, so the strike is more effective.

Answer 28

False

Question 29

The management and union at TriColor have bargained for two years without reaching an agreement. After notifying the union, TriColor prohibited the workers from entering the factory to work. This is a lockout.

Answer 29

True

Question 30

The workers at Thom Trucking went on strike over wages. Thom Trucking may hire permanent replacement workers.

Answer 30

True

Question 31

Corporations have perpetual existence.

Answer 31

True

Question 32

The most dominant form of business ownership is the corporation.

Answer 32

True

Question 33

To be a close corporation, the business must not have publicly traded stock.

Answer 33

True

Question 34

Limited liability is a major advantage of a partnership as compared to a corporation.

Answer 34

False

Question 35

Shareholders of S corps have the tax status and advantage of a corporation but non of the protection from liability.

Answer 35

False

Question 36

Alan, a dentist, and his wife Martha, an attorney, can protect their personal assets with limited liability from their business dealings by creating and operating a professional corporation together.

Answer 36

False

Question 37

A partnership is a taxable entity, separate from the partners.

Answer 37

False

Question 38

Corporations have a distinct advantage over other forms of business organization in the area of taxation.

Answer 38

False

Question 39

Franchise fees can be costly, but they are usually payable over a number of years, after profits are generated from the business.

Answer 39

False

Question 40

A limited liability company, unlike a Subchapter S corporation, can have members that are corporations, partnerships, or nonresident aliens.

Answer 40

True

Question 41

To form an LLC, a charter but not an operating agreement must be filed with the Secretary of State in the jurisdiction where the business will operate.

Answer 41

True

Question 42

Filings are required to form and operate a limited liability partnership.

Answer 42

True

Question 43

Nicholas and Holly are partners in a toymaking shop. If Rudolph obtains a judgment against Nicholas for injuring Rudolph while Nicholas was on partnership business, Rudolph must try to collect from the partnership before going after Nicholas’ personal assets.

Answer 43

True

Question 44

Alicia and Ted have a written agreement wherein they will share the losses of their joint business. This agreement is strong evidence they are partners.

Answer 44

True

Question 45

The dissolution of a partnership means the same as its termination.

Answer 45

False