1. Reference: “Divorce fallout.†Dr. Fred, following a messy divorce, has encountered significant financial difficulties. Dr. Fred has a friend named Slick Slim who tells Dr. Fred that he has been making lots of money by selling people a wristband that allegedly places pressure on a nerve that signals hunger resulting in a lack of appetite. Slick Slim tells Dr. Fred that, although the device does not really work, people who want to lose weight and look good in their bathing suits will do anything and that it sells like hotcakes. Slick Slim tells Dr. Fred that he will pay Dr. Fred five dollars for every band that Dr. Fred can sell to his patients. Dr. Fred proceeds to mail letters to patients suggesting the use of the band for weight loss. He also uses UPS to mail samples of the band to some patients along with letters encouraging purchase of the bands. Dr. Fred then proceeds to bill Medicare for office consultations he has with patients when they come in to purchase the bands. The scheme is wildly successful. Dr. Fred is able to entirely satisfy his alimony obligations within just a few months. Unfortunately, as patients begin to see that they are not having any weight loss, he has been receiving numerous complaints, and a friend of his told him that he could even be facing some criminal prosecution. By which of the following acts, if any, did Dr. Fred commit healthcare fraud?
By the receipt of kickbacks from Slick Slim only.
Dr. Fred did not commit any acts of healthcare fraud.
By the submission of false claims to Medicare only.
By submitting false claims to Medicare, by receiving kickbacks from Slick Slim, and also by merely discussing the matter with Slick Slim.
By the submission of false claims to Medicare and also by the receipt of kickbacks from Slick Slim.
2. Which of the following is the misappropriation of trust funds or money held in a fiduciary capacity?
Pretexting
Ponzi scheme
False pretenses
False entries
Defalcation
3. Billy knows that he can bring his case against Bob in a state court in Tennessee. He is unsure, however, of which county in which to proceed. Which of the following address the proper county?
Diversity jurisdiction
In personam jurisdiction
Venue
Subject-matter jurisdiction
Long-arm jurisdiction
4. Reference: “Employment law.†Clare, who has a successful pet grooming business, is planning to expand her operations from the U.S. into Canada and perhaps Mexico. A friend of hers, Bill, told her that she should carefully investigate the laws in those countries before she proceeded. Clare responded, however, that she was not concerned because by international treaty, and under NAFTA, so long as she is a U.S. citizen, she only has to obey U.S. laws. Laws of other countries would not apply to her business operations. Clare also replied that any other country would have the same strict employment-at-will standard as exists in the U.S. She tells him the employment-at-will standard is very strict and has not changed over the years, and that the nature of the relationship between employer and employee has remained unchanged. What concept is Clare referencing when she mentions employment-at-will?
The requirement that employers allow employees to take breaks at will after six hours of work.
The right of the employer or the employee to terminate the employment relationship at any time.
The requirement that employers provide safe working conditions.
The requirement that an employee give notice before quitting.
The requirement that an employer have good cause before discharging an employee.
5. Reference: “Junk food.†Mary Dogood, a member of the school board in ABC County, is appalled at the amount of junk food in the schools. She convinces the state legislature to pass an ordinance that no stores may sell any unhealthy, junk food within 500 feet of any school or day care center. A teacher of political science raises the issue of whether the regulation is valid and is told that it is a valid exercise of the jurisdiction- police power to protect its citizens. Convenience stores balk at the regulation and challenge it in court. What do courts generally presume regarding laws passed in accordance with states’ police power?
There is no presumption.
The law is valid.
The law is invalid.
The law is valid unless it involves the commerce clause.
The law is valid unless it involves a First Amendment right.
6. Ed goes door-to-door selling magazine subscriptions. Ed knows, however, that he is simply taking money for subscriptions and has absolutely no intention of ever arranging for the provision of magazines. Which of the following offenses, if any, has he committed?
False token
False entry
Ponzi scheme
False pretenses
Defalcation
7. Which of the following is an international agreement?
A written agreement made between states governed by international law and relating to international subject matter.
A general and consistent practice by states regardless of whether the practice is accepted as law.
A general and consistent practice by states that is accepted as law.
An agreement that is only between two states, not three or more relating to an international subject matter.
An agreement that is made between at least three states regarding an international subject matter.
8. If a contract does not provide for arbitration, parties may submit a specific dispute involving a contractual provision to arbitration through the use of a ______.
Suggested ADR resolution clause
Submission agreement
Binding arbitration clause
The parties may not submit a specific dispute to arbitration if the contract does not provide for arbitration.
Binding mediatory clause
9. Over which of the following does the federal court system have exclusive jurisdiction?
Admiralty cases only
Copyright cases only
None of the above
Admiralty, bankruptcy, and copyright cases
Bankruptcy cases only
10. Reference: “Environmental Concerns.†Connie, the president of a company that makes paper, has a new interest in the environment. She recently went to a seminar on environmental dangers and has decided to take steps to clean things up. She started at home and has now felt compelled to change things at work. Connie had to face the fact that her company has been cheating and is not in compliance with applicable environmental regulations due to dumping in the nearby river. Her company has never been cited because it employs a very large number of people in the community, including the mayor- wife and the chief-of-police- brother. On her mission to clean things up, Connie has decided to go even further than the law requires and install the very latest environmental protections. When she announced her plan, the chair of the company- board of directors, Brooke, had a meeting with Connie. Brooke told Connie to analyze the situation carefully because the cost of the additional equipment would mean no dividend to shareholders and no raise for employees. Furthermore, Brooke told Connie that installing all the new equipment would result in higher prices for the company- paper produce and could bankrupt the company because of foreign competition. Brooke hinted that Connie could be fired if she persisted. Brooke suggested that Connie just be concerned with a minimal standard of ethics.
Which of the following is the minimal standard that a business must meet in a consideration of business ethics suggested by Brooke?
Decisions must meet the criteria of a follower of deontology.
Decisions must be legal and decisions must receive a majority vote of acceptance by employees.
Decisions must be legal.
Decisions must meet the criteria of a follower of utilitarianism.
Decisions must receive a majority vote of acceptance by employees.
11. Which of the following is a type of ADR?
Mediation
Consultation
Case argument
Focus grouping
Case analysis
12. Assume a businessperson who owns a computer equipment store is delinquent in paying rent to the landlord. The resulting dispute focuses on ______law.
Private
Preferential
Consensual
Public
Black letter
13. When may government agents search without a search warrant?
All of the above.
When they can show that a felony is involved.
When they can show that the suspect who lives in the residence at issue has been in jail previously.
When law enforcement officials believe it likely that the items sought will be removed before they can obtain a warrant.
Outside of normal working hours for a judge.
14. What do the letters “WPH†mean in reference to the “WPH Framework for Business Ethics†discussed in the text?
Where, Procedure, and How
When, Plan, and How
Where, Plan, and Hope
Why, Procedure, and Hope
Who, Purpose, and How
15. Assuming the requisite elements are proven, which of the following is a defense when it is established that a crime is committed because the person committing the act was threatened with immediate bodily harm or loss of life unless the offense was committed?
Duress.
Entrapment.
Necessity.
Justifiable use of force.
Inescapable action.
16. Which of the following is the forceful and unlawful taking of personal property?
Larceny
Criminal fraud
Burglary
Arson
Robbery
17. Reference: “Accounting Advice.†Brad, a newly hired Certified Public Accountant, who barely passed his boards, was asked by a business client, a chief executive officer, about the effect of the Sarbanes-Oxley Act on an accounting issue. Brad assured the client that the client should not be concerned about the Act because it is very vague, unspecific, and difficult to understand. Brad told the CEO that in any event, the CEO could not be held personally responsible regardless of what happened because only company business was involved. Brad also told the CEO that there is no oversight involved with the act. Later that same day, a coworker of Brad discovered that the CEO had been involved in misstating some financial reports and had also destroyed financial documents to cover up fraud. An employee at the company, Laura, had informed the coworker. When the issue was mentioned to the CEO, he immediately fired Laura. Which of the following is true regarding the Act and Laura- firing?
The act provides protection for whistle-blowers only if it can be shown that a significant amount of money, in excess of $10,000, was involved in any misstatement.
The act provides protection for whistle-blowers only if it can be shown that a significant amount of money, in excess of $5,000, was involved in any misstatement.
The act does not provide protection for whistle-blowers such as Laura.
The act provides protection for whistle-blowers who work for an accounting firm, but not for any other employees.
Laura- whistle-blowing would be protected under the act, and her firing was illegal.
18. The idea that we should interact with other people in a manner consistent with the manner in which we would like them to interact with us is called the ______.
Equalization Rule
Ten Commandments Rule
Silver Rule
Golden Rule
Ethical Realization Rule
19. Which of the following serves to combat bribery of foreign officials?
The Foreign Official Bribery Act
The Foreign Corrupt Practices Act
The International Bribery Prohibition Act
The Fair Business Act
The International Fair Business Practices Act
20. Reference: “Revenge.†Jane, a first year law student, while walking to school in inclement weather, accidentally slipped on ice knocking down Greg, another first year law student, breaking his glasses. He was very angry with Jane and let the air out of one of her car tires. Greg also decided to sue Jane for negligence claiming as damages $300 for his broken glasses. He decided that he already knew all about the law and did not need a lawyer. Greg sued Jane in state court. Jane, in the same lawsuit, brought an action against Greg for letting the air out of her tire. At the trial in state court, Jane told the judge that a friend, Susie, told her that she saw Greg let the air out of Jane- tire. The judge disallowed Jane- testimony on that issue. Susie, however, who was in the courtroom also came and testified to that effect. The state court judge ruled in favor of Jane. Greg said that he was not giving up and that he would seek double damages on appeal in federal court. Jane and Greg live in different states when not attending school. After the trial, Jane reported Greg- actions of letting the air out of her tire to the police who said that they would proceed with a criminal action against Greg. Jane- action against Greg for the tire is called a[n] ______.
Counterclaim
Discovery claim
Third party claim
Cross-claim
Service claim
21. Reference: “The Stolen Book.†Susan is told by Betty that Bob stole her business law book out of her car. The next day Susan confronts Bob and slaps him for stealing her book. Bob had Susan arrested for slapping him. Susan sues Bob for damages to the amount of the book and for maliciously having her arrested. Claiming that she lied, Bob sues Betty for defamation. The lawsuit Susan has against Bob for damages for stealing her book involves which of the following?
Administrative law
Comprehensive law
Private law
Public law
Both public and private law
22. According to the ______ Amendment to the Constitution, all powers that the Constitution neither gives exclusively to the federal government nor takes from the states are reserved for the states.
Second
Sixth
First
Fifth
Tenth
23. Reference: “Cosmetic profits.†Sally is the vice president at Big Name Cosmetics company. She learns that the company is soon going to purchase a smaller chain of stores. It is expected that stock in Big Name Cosmetics will rise dramatically at that point. Sally immediately buys a number of shares of her company- stock. She also tells her friend Alice about the expected purchase of stores. Alice wanted to purchase stock in the company but lacked the funds with which to do so. Although she did not have the funds in Bank A, Alice decided to draw a check on Bank A and deposit the check in Bank B and then proceed to write a check on Bank B to cover the purchase of the stock. She hoped that she would have sufficient funds to deposit before the check was presented for payment. Of which of the following, if any, is Sally guilty of by providing information to Alice regarding the purchase?
She is guilty of an insider trading violation by being tipped.
She is guilty of criminal extortion.
She is guilty of an insider trading violation by tipping the information.
She is guilty of an insider trading violation by both tipping and being tipped.
She is not guilty of any offense.
24. At trial, a defense lawyer states that evidence should not be admitted because it is “fruit of the poisonous tree.†Upon which of the following is the attorney relying?
The Eve Rule.
The exclusionary rule.
The Eden Rule.
The Fourth Amendment Rule.
The Adam Rule.
25. Which type of legal system exists in North Korea?
Socialist legal system
Asian legal system
Common law legal system
Islamic legal system
Civil legal system
26. Carla learns that her employer, a healthcare facility, is committing fraud against the government by filing false Medicare claims. Under which of the following might she obtain a portion of any recovery obtained by the government?
The Healthcare Fraud Act.
The Medicare Recovery Act.
RICO.
The False Claims Act.
The Sarbanes-Oxley Act of 2002.
27. The first _____ amendments to the U.S. Constitution are known as the Bill of Rights.
Nine
Eight
Five
Ten
Six
28. The plaintiff must provide the defendant in a lawsuit with a copy of the complaint. That process is called ______.
Summons issuance
Service of process
Subpoena delivery
Service delivery
In personam service
29. Which of the following requires that we see murder as a moral action as long as the murderer believes that the action is best for him or her?
Categorical Imperative
Absolutism
Uncertainty of Thought
Deontology
Ethical Relativism
30. Reference: “Fast Food Dilemma.†Richard, who just started at his new job as an assistant manager at a fast-food restaurant, wants to make a good impression. He thinks that things are going great. On only the second day on the job, however, he sees his boss Jill, the manager, slink out of the restaurant with a big box of hamburger that she puts in her car and then speeds away. Richard is fairly certain that she did not pay for the hamburger. Richard asks advice of his best friend, Bruce; his girlfriend, Sally; his sister, Jenny; and his dad, Frank. Bruce says that there are no real objective standards and that Richard should just decide what is best for him. Sally says that Richard should focus on the consequences and focus on the greatest benefit to all involved. She believes that it will do no real harm for Richard to keep his mouth shut because the fast-food restaurant is making plenty of money and probably does not pay Jill enough anyway. Plus, getting in trouble with Jill could cause problems at work, and if Richard loses his job, Richard and Sally might have to put off their marriage. Jenny says that on balance the greatest good would be to tell Jill because stealing does not generally produce the greatest satisfaction. Richard- dad says that as a matter of principle Richard should tell Jill because stealing is simply wrong. Which of the following theories most accurately fits the advice given by Jenny?
Act utilitarianism
Rule utilitarianism
Deontology
Ethical relativism
Virtue ethics
31. Which of the following prohibits slavery and grants everyone the right to free choice of employment, just and favorable conditions of work, reasonable limitations on working hours, and compensation adequate to provide for the worker- health and that of his or her family?
Title VII of the Civil Rights Act of 1964
The Universal Declaration of Human Rights of 1948
The Fair Wage Standard of 2000
The International Freedom Act of 2003
The Universal Employee Care Act of 1990
32. The _____ prohibits U.S. companies from offering or paying bribes to foreign government officials, political parties, and candidates for office for the purpose of obtaining or retaining business.
The International Trade Act
The International Fairness Objective Act
The Foreign Bribery Act
The Foreign Political Act
The Foreign Corrupt Practices Act
33. Billy signs an arbitration agreement providing that he will arbitrate any disputes with his employer, ABC Company. Billy believes that ABC Company has discriminated against him in violation of the Americans With Disabilities Act. The EEOC has also investigated the situation and has brought an action against ABC Company alleging that ABC Company discriminated against Billy in violation of the Americans With Disabilities Act. What is the effect of the arbitration clause in regards to the action brought by the EEOC?
The EEOC can avoid the arbitration clause only if it can show that it prosecuted ABC Company in the past and that ABC Company is a repeat offender.
The arbitration clause is enforceable and binding on the EEOC only if Billy is the only employee who has been discriminated against under the Americans With Disabilities Act.
The arbitration clause is not binding on the EEOC.
The arbitration clause is enforceable and binding on the EEOC only if ABC Company provided EEOC with a copy of the agreement before the suit was filed.
The arbitration clause is enforceable and binding on the EEOC.
34. The ____ facilitates international cooperation in opening markets and provides a forum for future trade negotiations and the settlement of international trade disputes.
World Trade Organization
National Trade Organization
International Cooperation Agreement
International Marketing Agreement
Generally Favored Nation Organization
35. Which of the following is an example of the imposition of strict liability?
A robber pulls a gun to rob a bank teller.
An adult shoplifts in a department store.
A burglar breaks into a home to steal jewelry.
A business sells cigarettes to a minor.
A minor shoplifts in a department store.
36. Laws are enforced by which of the following?
Community consensus
Courts
All the above
Federal Congress
State legislatures
Top of Form
37. Reference: “Miracle Face.†Tara developed a great new type of face cream guaranteed to provide total sun protection, remove wrinkles, and result in anyone looking at least ten years younger. Her product, Miracle Face, became extremely popular in the U.S., where she has several shops, and also in other countries to which it was shipped. Tara has a number of individuals in other countries seeking to team with her in sale of Miracle Face. Sam, a citizen of Mexico, asks that she grant him permission to use her name and any associated trademarks, and allow him to sell Miracle Face in Mexico. Tara has an offer, however, from another Mexican citizen, Maria. Maria proposes that she and Tara associate together, open a business to sell Miracle Face, and share profits and management responsibilities. Tara has also thought about simply opening her own business in Mexico in conformity with Mexican laws. She would then, simply, hire employees in Mexico to sell the product. Another matter Tara has considered is simply arranging for her products to be shipped to Mexico for sale, and she is interested in the effect of any trade agreements in effect between the U.S. and Mexico. Assuming that Tara decides to make the deal Sam proposes, Sam would be referred to as a(n)_____ and Tara would be referred to as a(n) ______.
Franchisee, Franchisor
Franchiser, Franchisee
Representative Offeror, Representative Offeree
Venturor, Venturee
Affiliator, Affiliatee
38. Which of the following countries are signatories to the North American Free Trade Agreement?
England, France, and Italy
England, France, and Spain
United States, Canada, and Mexico
Canada, Mexico, and Great Britain
United States, Canada, and Japan
Top of Form
39. Reference: “Inattentive Driving.†Molly decided not to attend class and instead decided to drive off campus to check on her new dress for the upcoming dance feast. While driving, Molly is busy talking on her cell phone with her friend Sharon to convince her into going to the dance with Molly- brother who has a big crush on Sharon. Unfortunately for Molly, there is a statute in her state outlawing talking on a cell phone while operating a motor vehicle. Molly crashes into the side of Sam- new convertible when she looks down to pick up a can of soda she just dropped onto her new jeans. A police officer just down the street comes over to investigate. Molly explains to him that it was difficult to hold the cell phone in one hand, the soda in the other, and also drive. The officer was not impressed. Around that time, Sam comes along. He is furious regarding the significant dent in his new car. Molly says that she has insurance, and she will cover the whole incident. Sam says that is insufficient. The officer is annoyed because it is his lunch break. He tells Molly that she must obey the law, and proceeds to write several citations to her. Which type of law is involved in the above situation considering Molly- interaction with both the officer and Sam?
Public law, private law, civil law, and criminal law
Civil law and private law only
Public law only
Criminal law and public law only
Private law only
40. ____ is the type of alternative dispute resolution procedure wherein disputes are submitted for resolution to private, non-official persons selected in a manner provided by law or the agreement of the parties.
Multi-cultural evaluation
Arbitration
International evaluation
Neutral evaluation
Mediation
Top of Form
41. Which of the following do appellate courts primarily handle?
Questions of law and fact, and also cases when they initially enter the legal system
Questions of law and fact
Questions of fact
Cases when they initially enter the legal system
Questions of law
42. A ______ is a court order that authorizes law enforcement agents to search for or seize items specifically described in the warrant.
Seek warrant
Search warrant
Subpoena warrant
Review authorization
Search authorization form
43. Which of the following are considered infants under the law in regards to criminal activity?
Any child ten and under.
Any person under the age of majority.
Any child sixteen and under.
Any child twelve and under.
Any child five and under.
44. A judge reports that a jury was “hung.†What does the judge mean?
That the jury wanted to hang the prosecutor for unjustly charging the defendant.
That the jury wanted to hang the defendant by imposing a heavy sentence.
That the jury had waited an excessive amount of time before retiring for the evening.
That the jury had waited an excessive amount of time before reaching a verdict.
That the jury could not reach a decision.
45. The U.S. Constitution allocates the power of the federal government among _____ branches of the government.
Five
Two
Three
Six
Four
Bottom of Form
Bottom of Form
Bottom of Form
46. Which of the following is true regarding strikes under the National Labor Relations Act?
A union must contact the National Mediation Service to attempt to mediate its demands before beginning a strike to achieve higher wages or better working hours.
A union must contact the State Mediation Consortium to attempt to mediate its demands before beginning a strike to achieve higher wages or better working hours.
A union must contact the Federal Mediation and Conciliation Services to attempt to mediate its demands before beginning a strike to achieve higher wages or better working hours.
A union must contact the Judicial Arbitration and Mediation Services to attempt to mediate its demands before beginning a strike to achieve higher wages or better working hours.
A union has no obligation to inquire into mediation before beginning a strike for any reason.
47. The concept of ______suggests that individuals should have the freedom to disobey a law enacted by people if their conscience goes against the law and they believe the law is wrong.
Legal positivism
None of the above
Natural law
Legal-realism
Conscience reaction
48. Reference: “Pet Flicks.†Jill went to work as an independent contracting photographer for Exotic Pet Flicks, a company specializing with photographing owners of exotic pets, such as monkeys and snakes, with their owners. The company- home office was in California, but Jill worked in Florida. Before she started work, Jill signed an agreement to arbitrate any dispute she had with the company. The arbitration agreement provided that in the event of a dispute, Jill would completely cover the cost of the arbitration; that she could only receive up to $150 in damages regardless of her claims, punitive or otherwise; that any arbitration would be conducted at the company- home office. The agreement also provided that the arbitrator was not bound to strictly follow the official court rules of evidence. Jill signed the agreement because she really needed a job and liked animals. Her only previous animal photography experience, however, had been with cats and dogs. Jill- contract provided that she would be paid $100 per shoot and that the company would take steps to ensure her safety. One day she was called in to photograph a skunk and its owner. She was told by the receptionist at Exotic Pet Flicks that the skunk had been altered so that it could not spray. Jill felt safe. Unfortunately, the skunk had not been altered. Just as she was starting to shoot, the skunk became upset. It ran over, sprayed Jill, and in the resulting commotion, Jill- expensive camera was knocked over and broken. Plus, Jill- outfit was ruined and she stank for days. Jill wants to sue Exotic Pet Flicks for $5,000 to cover the cost of her camera, her clothing, and her general stinkiness for several days. Would the arbitration agreement be deemed void because it provided that the arbitrator was not bound by the federal rules of evidence?
Yes.
Only if the arbitrator allows hearsay evidence into the proceeding.
Only if the arbitrator was not also a lawyer.
Only if the arbitrator was a lawyer.
No, because the rules of evidence applicable in a trial are typically relaxed in arbitration.
49. Which of the following is the term that describes wrongful behavior in a criminal action?
Actus reus.
None of the above.
Res judicta.
Stare decisis.
Mens rea.
50. Positive abstractions that capture our sense of what is good or desirable are called ______.
Desirable principles
Conscience demands
Action goals
Ethical ideas
Values
51. In which of the following involves tricking consumers into changing their phone service to another carrier without their consent?
Slamming
Stuffing
Cramming
Fraudulent adding
Fraudulent transfer
USA 
India