Deck 10: The Legal Environment

Question 1

T F If a business involves the sale or preparation of food, a business owner will need to obtain Health Department permits and also be subject to regular inspections.

Answer 1

True

Question 2

Bankruptcy stays on an individual's credit report for an average of five years.

Answer 2

False

Question 3

The best time for a small business to get a lawyer is when the business is in trouble.

Answer 3

False

Question 4

To be considered sexual harassment, only those directly affected by the actions can file a suit.

Question 5

Executive workers and professional employees may be exempt from the minimum wage and overtime pay requirements of the Fair Labor Standards Act.

Question 6

Competition decreases the need for government intervention in the market.

Question 7

A contract is a promise that is enforceable by law.

Question 8

In most cases, declaring bankruptcy for a failed business will leave the business owner penniless and homeless.

Question 9

Antitrust laws were written to prevent large businesses from forming trusts.

Question 10

Bankruptcy is an easy way out for businesses that are in financial trouble.

Question 11

The Americans with Disabilities Act of 1990 considers recovering drug addicts, alcoholics, and individuals with HIV or AIDS as those covered by the employment discrimination provision.

Question 12

Chapter 7 bankruptcy means that the business will be liquidated.

Question 13

Laws ensure fair competition, allow contracts to be enforced, and protect consumer rights.

Question 14

According to recent health care reform legislation, states must create health insurance exchanges for small businesses and their employees beginning in 2014.

Question 15

With a minimal education, the wording of most laws and regulations is easy to understand.

Question 16

Bankruptcy is a remedy for becoming solvent.

Question 17

Chapter 12 bankruptcy provides a second chance for a business that is in financial trouble but still has potential to succeed.

Question 18

Chapter 13 bankruptcy allows individuals, including small business owners, who owe less than $250,000 in unsecured debts and secured debts of less than $750,000 to pay back creditors over a three- to five-year period.

Question 19

More and more, U.S. laws are becoming increasingly based on the rule of caveat emptor: "Let the buyer beware."

Question 20

Under Chapter 13 bankruptcy, a plan must be submitted to a bankruptcy judge that shows how most types of the debt will be paid in full.

Question 21

Intellectual property is a product or some type of human thought that is created through the mental skills of a person.

Question 22

A copyright is synonymous with a patent.

Question 23

The best time for a small business to get a lawyer is

A) When the business is in trouble
B) During court hearings
C) When writing the business plan
D) While the business is still an idea

Question 24

A trademark is a form of protection for intellectual property provided to the owner of a brand name or symbol.

Question 25

A novel item or creation meets one of the four requirements for obtaining a patent.

Question 26

Most small business problems are split between _____ and _____.

A) Expenses, revenue
B) Costs, regulations
C) Day, night
D) Employees, location

Question 27

A patent is a form of protection for intellectual property provided to an inventor for a period of 17 years.

Question 28

Patents, copyrights, or trademarks obtained in the United States will provide the same protection in foreign countries.

Question 29

Which of the following acts was written to prevent large businesses from forming trusts?

A) Clayton Act
B) Federal Trade Commission Act
C) Fair Debt Collection Practices Act
D) Civil Rights Act of 1964

Question 30

Contracts involving the sale of real estate must be in writing.

Question 31

The payment of someone else's debt should always be in writing.

Question 32

According to the U.S. Department of Commerce, about how much do U.S. businesses lose annually to the counterfeiting of trademarked and copyrighted products?

A) $2 million
B) $20 million
C) $200 million
D) $2 billion

Question 33

A copyright protects literary, musical, or artistic works for the period of the creator's life plus 125 years.

Question 34

Which of the following is not a power of the Federal Trade Commission?

A) Conduct hearings
B) Issue cease-and-desist orders
C) Write new laws governing competition
D) Investigate companies for unfair practices

Question 35

A contract must be in writing to be enforceable.

Question 36

To qualify for a patent, an invention does not necessarily have to provide some legal utility.

Question 37

The three types of patents in existence today are utility patents, design patents, and plant patents.

Question 38

Capacity is one of the four basic elements of a contract.

Question 39

Contract law comprises the body of laws that are intended to ensure parties entering into contracts comply.

Question 40

As seen in the chapter opener, the International Chamber of Commerce estimates that what percentage of total world trade is from pirated goods?

A) One-tenth of one percent
B) 20 percent
C) 6 percent
D) They don't have an estimate

Question 41

Arco Advertising employs two individuals who are confined to wheelchairs. The company is required by the Americans with Disabilities Act to provide modifications of the work environment, such as wheelchair ramps, making it possible for the disabled workers to enjoy equal employment opportunities. These modifications are referred to as

A) Undue hardship
B) Reasonable hardship
C) Reasonable accommodation
D) Undue modification

Question 42

Which of the following is the act that was passed in 1938 to regulate worker's pay?

A) Fair Labor Standards Act
B) Worker's Compensation Act
C) Civil Rights Act
D) Americans with Disabilities Act

Question 43

__________ are available to aid businesses with Americans with Disabilities Act compliance.

A) Grants
B) Loans
C) Tax incentives
D) Federal funds

Question 44

The act of keeping prices artificially high is referred to as

A) Monopoly
B) Collusion
C) Zoning
D) Antitrust

Question 45

Workers' compensation is insurance that provides replacement income and medical expenses to workers who suffer

A) Work-related injury
B) Underemployment
C) Discrimination
D) Silently

Question 46

__________ was passed to try to ensure every working man and woman in the nation safe and healthful working conditions and to preserve human resources.

A) OSHAW
B) NIOSH
C) The Occupational Safety and Health Act of 1970
D) The Workers Compensation Act of 1976

Question 47

A/An __________ is an action that is excessively costly, extensive, substantial, or disruptive, or that would fundamentally alter the nature or operation of the business.

A) Hardship
B) Undue hardship
C) Economic hardship
D) Financial hardship

Question 48

The Civil Rights Act of 1991 places the burden of proof on

A) The court system
B) The employee
C) The employer
D) The public

Question 49

Workers' compensation premiums are based on two major factors: _____ and _____.

A) Annual revenue; number of employees
B) Industry classification; tax bracket
C) State business is located; payroll
D) Industry classification; payroll

Question 50

Costs of workers' compensation to businesses are

A) Declining
B) Soaring
C) Holding constant
D) Irrelevant since they are paid by employees

Question 51

Which title under the Americans with Disabilities Act requires all businesses serving the public to make their facilities and services accessible to the disabled?

A) Title V
B) Title VI
C) Title VII
D) Title III

Question 52

The Americans with Disabilities Act was passed to guarantee individuals with disabilities all but which of the following rights?

A) The right to obtain and hold a job
B) The right to travel on public transportation
C) The right to use of telecommunication services
D) The right to purchase handicap-operated vehicles

Question 53

For businesses with fewer than _______ fulltime employees, there is no health insurance requirement, according to the Health Care Reform Act.

A) 10
B) 50
C) 30
D) 100

Question 54

The Civil Rights Act of 1964 prevents discrimination on all of the following grounds except

A) Sex
B) Race
C) National origin
D) Pregnancy

Question 55

__________ tries to discourage illegal immigration into the United States by denying employment to aliens and extends coverage of the 1964 Civil Rights Act to foreign-sounding or foreign-looking individuals.

A) The Civil Rights Act of 1991
B) The Americans with Disabilities Act of 1990
C) The Immigration Reform and Control Act of 1986
D) The Civil Rights Act of 1964

Question 56

All of the following is true regarding sexual harassment behavior except which of these?

A) The victim has to be of the opposite sex
B) Sexual harassment includes unwelcome sexual advances
C) The harasser can be a victim's supervisor
D) Harassment can occur without economic injury

Question 57

__________ is the practice of using different cutoff test scores for different groups.

A) Score norming
B) Race norming
C) Group norming
D) Job norming

Question 58

Which of the following may an employer do under the Americans with Disabilities Act?

A) Question applicants about the severity, nature, or origin of a known disability
B) Refuse employment due to the employee needing special accommodation
C) Require drug tests at any time in the employment process
D) Require medical or physical exams prior to a conditional offer of employment

Question 59

The Occupational Safety and Health Administration is the __________ branch that the Occupational Safety and Health Act created.

A) Enforcement
B) Research center
C) Enforcement review board
D) Information service

Question 60

__________ prevents discrimination based on gender, race, color, religion, or national origin in any terms, conditions, or privileges of employment.

A) The Civil Rights Act of 1991
B) The Equality Act
C) The Equal Rights Act of 1965
D) The Civil Rights Act of 1964

Question 61

Which of the following methods of bankruptcy would be best for a business that still has some hope of being financially successful?

A) Chapter 7
B) Chapter 11
C) Chapter 12
D) Chapter 13

Question 62

The legality element of a contract states that

A) A contract must be intended to accomplish a legal purpose.
B) A contract must include a legitimate offer and a legitimate acceptance.
C) Something of value must be exchanged between the two parties.
D) The parties entering into a contract must have the capacity to do so.

Question 63

Which of the following is not one of the four basic conditions or elements that a contract must meet in order to be binding?

A) Legality
B) Agreement
C) Capacity
D) Formal documentation

Question 64

The Bankruptcy Abuse Prevention and Consumer Protection Act requires a comparison of the debtor's income to the

A) median income in the individual's home state
B) median national income
C) 75^th percentile of median income in the individual's home state
D) 25^th percentile of median national income

Question 65

In some cases, local zoning commissions may grant a/an ___________, which allows businesses to operate without complying with the regulation or without having the regulation be changed.

A) Variance
B) eurozone
C) Restriction
D) Breach of contract

Question 66

Which of the following methods of bankruptcy would be best for a business that has no hope of getting out of its financial indebtedness?

A) Chapter 7
B) Chapter 12
C) Chapter 13
D) Chapter 11

Question 67

Bankruptcy remains on a credit report for how many years?

A) Three years
B) Five years
C) Seven years
D) Nine years

Question 68

__________ businesses are the fastest growing segment in new business startups.

A) Home-based
B) Small
C) Resort-based
D) Office-based

Question 69

OSHA requires most employers with ______ or more employees to keep records of occupational injuries and illnesses.

A) 3
B) 8
C) 11
D) 50

Question 70

Alexis is looking to open her own business, and she wants to research the local and county requirements for obtaining permits and licenses. Which of the following would be a good resource to consult?

A) The CIA
B) An immigration attorney
C) Federal government officials
D) Her local Chamber of Commerce

Question 71

The reorganization plan under Chapter 11 bankruptcy protects the filer from which of the following?

A) Foreclosure
B) Liquidation
C) Paying creditors
D) Credit report damage

Question 72

Which of the following individuals are entitled to unemployment compensation?

A) Sandy, who quit her job voluntarily
B) Lonnie, who was fired for lying to his boss
C) Wilbert, who was caught stealing
D) Donna, who was laid off from her job for two months

Question 73

__________ laws control what a business can sell and where it can operate.

A) Access
B) Sales
C) Subdividing
D) Zoning

Question 74

As an employer, you have all but which of the following choices if cited for a violation by the Occupational Safety and Health Administration?

A) Appeal the penalties
B) Seek a variance
C) Correct the violation
D) Choose to ignore the citation

Question 75

__________ laws are used to control parking, waste disposal, and sign size and placement.

A) Property
B) Zoning
C) Enhancement
D) Land use

Question 76

A land buyer interested in beginning a small business should be certain how a piece of property is __________ before buying the land.

A) Subdivided
B) Supplied with utilities
C) Zoned
D) Accessed

Question 77

Which percentage of all bankruptcy filings are filed under Chapter 11?

A) Three percent
B) Five percent
C) Seven percent
D) Nine percent

Question 78

Bankruptcy accomplishes two different objectives. These objectives are which of the following?

A) Liquidation and termination
B) Insolvency and termination
C) Insolvency and reorganization
D) Liquidation and reorganization

Question 79

Which of the following is not a contract that must be in writing to be enforceable?

A) Sale of real estate
B) Contracts paying someone else's debt
C) Contracts taking less than one year to perform
D) Contracts involving sales of goods valued at $500 or more

Question 80

Which percentage of all bankruptcy filings are filed under Chapter 13?

A) 3 percent
B) 10 percent
C) 18 percent
D) 25 percent