Question 1

We Love Pets manufactures a pet carrier that is known to suddenly come apart if the pet shakes itself at the same time the owner picks the carrier up.It seems the combination of actions make the hinge pins fall out.WLP could be liable under:

Accepted Answer

WLP could be liable for failure to warn their customers of the potential danger of the carrier coming apart under certain circumstances. They have a duty to provide adequate warning about the proper use of their product to prevent harm. Negligent manufacturing would imply that they made a mistake during the manufacturing process that caused the carrier to have this defect, but the question states that the carrier is known to suddenly come apart under certain circumstances. Implied warranty to perform would imply that the product should work as intended, but the carrier does work as a carrier; it is only when the pet shakes itself in combination with the owner picking up the carrier that it falls apart. Negligent design would imply that there was a flaw in the design of the carrier that made it likely to come apart under normal use or that it was not made with proper safety standards in mind. However, the question seems to imply that the carrier is sound in design but has a specific vulnerability to certain conditions.

Question 2

The ________ forbids contracts that restrain trade or create monopolies.

Accepted Answer

The Sherman Anti-Trust Act prohibits contracts, combinations, and conspiracies that restrain trade or create monopolies. The Clayton Act and Robinson-Patman Act also address antitrust issues, but focus on specific practices such as price discrimination and mergers/acquisitions. The Miller-Tydings Act relates specifically to resale price maintenance agreements.

Question 3

The act that is the foundation on which antitrust policy in the United States is built is:

Accepted Answer

The Sherman Anti-Trust Act is the foundation of antitrust policy in the United States. It was passed in 1890 and is still in effect today. The act prohibits monopolies and contracts, combinations and conspiracies that unreasonably restrain trade. It serves as the basis for all other antitrust laws in the United States.

Question 4

The author of a hit song could apply for a ________ to protect that work from unauthorized use by others.

Accepted Answer

A copyright is the legal protection granted to the creator of an original work, such as a song, to control its use and distribution. A patent protects an invention, a trademark is a symbol or phrase used to identify a company or product, and a servicemark is similar to a trademark but relates to a service rather than a product.

Question 5

________ was passed to strengthen the Clayton Act,specifically to address price discrimination because many businesses were circumventing the original rules.

Accepted Answer

The Robinson-Patman Act was passed in 1936 to strengthen the Clayton Act's rules on price discrimination. It addressed the issue of businesses circumventing the original rules by extending protection to smaller retailers and wholesalers who were often charged higher prices than larger competitors.

Question 6

The first step in receiving a patent for the invention is to:

Accepted Answer

The answer of The first step in receiving a patent...

Question 7

The Clayton Act prohibits:

Accepted Answer

The Clayton Act prohibits interlocking directorates, which means that individuals cannot serve on the board of directors for two or more competing companies. Choices A and B are incorrect because fair trade agreements and sales contracts/warranties are not addressed in the Clayton Act. Choice C is incorrect because the Clayton Act allows for corporations to purchase the stock of another corporation, as long as it does not create a monopoly or substantially lessen competition.

Question 8

The duration of a ________ is indefinite but can be lost if it loses its unique character.

Accepted Answer

A trademark can last indefinitely as long as it is continually used and retains its distinctiveness in the marketplace. However, it can be lost if it becomes generic or if it is not actively protected by the owner. Patents and copyrights have a set duration before they expire, and warranties have a limited time period for which they apply.

Question 9

A ________ bankruptcy provides a small firm a second chance;it protects a firm from creditors while a reorganization plan is formulated.

Accepted Answer

Chapter 11 bankruptcy is also known as rehabilitation bankruptcy, which allows a small firm to reorganize and restructure its finances while being protected from its creditors. This chapter permits the debtor-in-possession to continue running the business while a reorganization is prepared.

Question 10

The FTC forbade the practice of:

Accepted Answer

The answer of The FTC forbade the practice of:
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Question 11

________ states that a seller cannot require a buyer to purchase only his/her product to the exclusion of other competitive sellers' products.

Accepted Answer

The Clayton Act specifically addresses anti-competitive practices, including exclusive dealing agreements where a seller requires a buyer to purchase only their products, thereby excluding competitors. This act aims to prevent such practices that could lead to monopolies or restrict competition.

Question 12

A ________ is any distinctive work,symbol,name,logo,etc. ,that a company uses to identify the origin of a product or to distinguish it from other products.

Accepted Answer

A trademark is a recognizable sign, design, or expression that identifies products or services of a particular source from those of others. It is a form of intellectual property that protects brand names, logos, and slogans.

Question 13

In a Chapter 7 bankruptcy:

Accepted Answer

In a Chapter 7 bankruptcy, the debtor simply declares all of the firm's debts and turns all assets over to a trustee who then sells and distributes them to settle both secured and unsecured debts. This is known as liquidation bankruptcy and is meant to provide a fresh start for the debtor by discharging all unsecured debts.

Question 14

An agent's duties when executing agency include:

Accepted Answer

The answer of An agent's duties when executing agency include:
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Question 15

________ is the most common type of bankruptcy,accounting for nearly 70% of all bankruptcies.

Accepted Answer

Chapter 7 bankruptcy is also known as "liquidation" bankruptcy, as it involves selling the debtor's non-exempt assets to pay off creditors. This is the most common type of bankruptcy, as it is often the quickest and simplest way for individuals and small businesses to wipe out most of their debt.

Question 16

The Robinson-Patman Act focuses on:

Accepted Answer

The Robinson-Patman Act is an American federal law that prohibits price discrimination, which is the act of charging different prices to different buyers for the same product. The goal of the act is to promote fair competition and prevent monopolies from unfairly manipulating pricing to drive out smaller competitors. Therefore, the focus of the act is on price discrimination, and not on product warranty, liability, or safety.

Question 17

A ________ is a grant giving the inventor of a product the exclusive right to make,use,or sell it for a specific time.

Accepted Answer

A patent is a grant given to the inventor of a product, giving them exclusive rights to make, use, and sell it for a certain period of time. Copyrights protect original works of authorship, trademarks protect logos and brands, and warranties are guarantees on the quality of a product.

Question 18

A Chapter 11 filing can be

Accepted Answer

Both A and B. A Chapter 11 filing can be either involuntary or voluntary. Involuntary filings occur when creditors force a business to enter into bankruptcy, while voluntary filings occur when a company chooses to enter bankruptcy on its own.

Question 19

In 1938,Congress passed the ________ creating an agency responsible for establishing standards for drugs,inspecting food and drug manufacturers,performing food-and drug-related research,etc.

Accepted Answer

The Food, Drug, and Cosmetics Act, passed by Congress in 1938, created an agency responsible for establishing standards for drugs, inspecting food and drug manufacturers, performing food- and drug-related research, and enforcing provisions of the Act to protect consumers from health hazards related to food, drugs, and cosmetics.

Question 20

This act was passed by Congress to supplement the Clayton Act,providing the power to prevent "unfair methods of competition in commerce or unfair or deceptive acts in commerce."

Accepted Answer

The Federal Trade Commission Act established the Federal Trade Commission (FTC) to enforce antitrust laws and prevent unfair methods of competition in commerce. It gave the FTC the power to investigate and prosecute companies engaging in unfair or deceptive practices, and to issue cease and desist orders to stop such practices. The act was passed in 1914, after the Sherman Antitrust Act, and was intended to supplement it by providing a specific body to enforce antitrust laws.

Quiz 22: The Legal Environment: Business Law and Government Regulation