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Questions
Q:
Peter, Preston, and Penny organize an LLC in January. While composing the operating agreement, they forget to include an amendment clause. Six months later, the situation demands an amendment to the operating agreement. Which of the following would best apply in this scenario?
A) The operating agreement can be amended if all three members approve.
B) The operating agreement cannot be amended as it contains no amendment provision.
C) The operating agreement can be amended with the affirmative majority of all shareholders.
D) The operating agreement can be amended only 60 days after a new amendment provision is included.
Q:
Some economists criticize the Lorenz curve because itA) accounts for differences in the size of households when it should not.B) does not include the cumulative percentage of households.C) does not include unreported income earned in the underground economy.D) represents the inequality of lifetime income when it should just look at a specific time period.
Q:
Crosby believes that he and Dakota agreed he would act as her personal sports trainer for seven workout sessions. In a later dispute, the existence of any contract can be judged by
a. the parties' statements at the time of their alleged contract.
b. what the defendant claims was the parties' intent.
c. what the plaintiff claims was the parties' intent.
d. what the parties agree they intended.
Q:
A(n) ________refers to an agreement among members that governs the affairs and business of the LLC and the relations among members, managers, and the LLC.
A) certificate of interest
B) franchise agreement
C) operating agreement
D) agreement of conversion
Q:
Cassandra accepts what she believes was an offer to work for Destination Vacations, Inc., as a chef. In determining whether a contract has been formed, an element of prime importance is
a. the condition of the workplace.
b the duration of the work.
c. the intent of the parties.
d. the subject of the contract.
Q:
When the words in a contract have more than one meaning, they are cut from the contract.
Q:
The certificate of interest acts the same as a(n) ________ issued by a corporation.
A) promissory note
B) stock certificate
C) deposit note
D) initial public offer
Q:
A(n) ________ refers to a document that evidences a member's ownership interest in an LLC.
A) certificate of interest
B) distributional interest
C) operating agreement
D) agreement of conversion
Q:
A reasonable, lawful, and effective meaning will normally be given to all of a contract's terms.
Q:
Sam Muller and Toby Richardson form an LLC in the state of Delaware. In the articles of organization, they specify the duration of the LLC as 25 years from the date of filing the articles of organization. Which of the following is true in this context?
A) The LLC is invalid as it does not specify a date of termination.
B) The LLC may be dissolved at will any time after 25 years from the date of filing the articles of organization.
C) Muller and Richardson have formed a term LLC.
D) Muller and Richardson have formed an at-will LLC.
Q:
Plain language laws regulate some types of contracts to require "legalese."
Q:
The Congress of Industrial Organizations (CIO) was formed in 1938 byA) John L. Lewis. B) Samuel Gompers. C) Walter Reuther. D) Ralph Nader.
Q:
An LLC that was organized in Alabama and is operating in Texas with no operations outside the United States is considered a ________ in Texas.
A) foreign limited liability company
B) limited liability partnership
C) domestic limited liability company
D) general partnership
Q:
The doctrine of quasi contract can be used only when there is an actual conÂtract that covers the matter in controversy.
Q:
An LLC is a ________ in the state in which it is organized.
A) sole proprietorship
B) domestic LLC
C) term LLC
D) general partnership
Q:
A party who confers a benefit on someone else unnecessarily can invoke the principle of quasi contract to recover the cost.
Q:
________ refer to the formal documents that must be filed at the secretary of state's office of the state of organization of an LLC to form the LLC.
A) Operating agreements
B) Certificates of interest
C) Articles of organization
D) Articles of amendment
Q:
In states where an LLC may be organized by only one member, ________ can obtain the benefit of the limited liability shield of an LLC.
A) corporations
B) sole proprietors
C) LLPs
D) general partnerships
Q:
A quasi contract is a true contract.
Q:
All of the following affect the demand elasticity for labor EXCEPT A) final product income elasticity.B) ease of substitution of labor for other inputs. C) final product price elasticity.D) labor costs as a portion of total cost.
Q:
A void contract produces legal obligations on the parties but is not otherwise enforceable.
Q:
Which of the following is true of an LLC formation?
A) Doctors and lawyers can operate practices as LLCs.
B) An LLC has to be organized in every state that it operates.
C) LC cannot be used to denote an LLC.
D) An LLC is a creation of federal law.
Q:
An unenforceable contract is one that cannot be enforced because of cerÂtain legal defenses against it.
Q:
Which of the following is true of LLC taxation?
A) An LLC is taxed as a corporation in all general cases.
B) Income or losses of an LLC do not flow through to the members' individual income tax returns.
C) Members of an LLC are subject to double taxation.
D) An LLC is not taxed at the entity level.
Q:
A void contract is enforceable if it is in writing.
Q:
Which of the following is true of the ULLCA?
A) It provides comprehensive laws for the formation of corporations.
B) It provides uniform laws for the dissolution of LLCs.
C) It is a state law that is uniform across the United States.
D) It governs the operation of proprietorships and LLPs.
Q:
If a voidable contract is avoided, the parties to it are released from it.
Q:
The owner of an LLC is called a ________.
A) general partner
B) limited partner
C) proprietor
D) member
Q:
The antitrust legislation that forbids a company from selling goods on the condition that the purchaser must deal exclusively with that company is theA) Sherman Act. B) Robinson-Patman Act. C) Fair Trade Commission Act. D) Clayton Act.
Q:
An executed contract is one that has been fully performed.
Q:
The ________ is a model act that provides comprehensive and uniform laws for the formation, operation, and dissolution of LLCs.
A) Williams Act
B) Securities Exchange Act
C) ULLCA
D) ULPA
Q:
An executory contract is one that has been fully performed.
Q:
Which of the following is true of an LLC?
A) An LLC is a creature of federal law.
B) An LLC is regarded as a separate legal entity.
C) An LLC cannot hold title to property.
D) The owners of an LLC are called general partners or specific partners.
Q:
An implied contract is implied from the words of the parties.
Q:
An LLC is a(n) ________.
A) unincorporated business entity
B) incorporated business entity
C) cooperative entity
D) proprietorship
Q:
Unrestricted entry and exit into the market is found in A) perfect competition and monopolistic competition. B) perfect competition and oligopoly.C) monopolistic competition and oligopoly.D) perfect competition, monopolistic competition and oligopoly.
Q:
In an express contract, the terms are fully stated in words.
Q:
Which of the following information should a certificate of limited partnership contain?
A) the latest date of dissolution of the partnership
B) a clause to not accept new general partners
C) the name of the party who becomes a general partner in the event of transfer
D) the scope of potential business opportunities and related investment
Q:
Informal contracts include all contracts other than formal contracts.
Q:
Which of the following is true of a limited partnership?
A) Other limited partnerships cannot become limited partners in an existing limited partnership.
B) A limited partner is personally liable for the debts of the partnership.
C) Corporations are allowed to become partners in a limited partnership.
D) A limited partnership can have only one general partner but multiple limited partners.
Q:
Justin and Michael form a limited partnership and start a car dealership. Justin is the general partner and Michael is the limited partner. Seven months after the commencement of the business, Pedro makes an investment and wishes to become a general partner. A week later, Michael's mother wishes to join the partnership as a limited partner. Which of the following is true in this scenario?
A) Pedro cannot be admitted as a general partner to the partnership after the business has commenced.
B) Pedro cannot be admitted as a general partner to the partnership as a limited partnership can only have one general partner.
C) Michael's mother cannot be admitted as a limited partner to the partnership as a limited partnership can only have one limited partner.
D) Both Pedro and Michael's mother can choose to be admitted as either general or limited partners to the partnership.
Q:
An implied contract is not an actual contract.
Q:
Which of the following is true of general and limited partners in a limited partnership?
A) Limited partners are exempt from annual capital investment and need only participate in management functions.
B) General partners are not personally liable for partnership debts.
C) General partners are required to invest capital and refrain from managerial activities.
D) Limited partners are not personally liable for partnership debts beyond their capital contributions.
Q:
The percentage of all sales contributed by the leading four or leading eight firms in an industry is known asA) a horizontal merger. B) a vertical merger.C) economies to scale. D) the concentration ratio.
Q:
An express contract must be in writing.
Q:
Which of the following partners of a limited partnership invests capital but does not participate in management?
A) specific partners
B) limited partners
C) general partners
D) sole proprietors
Q:
Informal contracts are usually based on their subÂstance rather than their form.
Q:
Which of the following partners in a limited partnership invests capital, manages the business, and is personally liable for partnership debts?
A) specific partners
B) limited partners
C) general partners
D) sole proprietors
Q:
A limited partnership has two types of partners, ________.
A) general partners and sole proprietors
B) general partners and limited partners
C) ordinary partners and liable partners
D) special partners and sole proprietors
Q:
No offer may be revoked before it is accepted.
Q:
A contract can be created only when a promise is given in exchange for another promise.
Q:
How are assets distributed after the dissolution of a general partnership?
Q:
Long-run equilibrium is characterized by zero profits in
A) monopolistic competition only.
B) perfect competition only.
C) both perfect competition and monopolistic competition.
D) market structures in which there are barriers to entry.
Q:
An offer to form a unilateral contract is accepted by a promise to perform.
Q:
Explain the formation of a general partnership.
Q:
A bilateral contract comes into existence at the moment an offer is made.
Q:
The ________ is a rule which provides that upon the death of a general partner, the deceased partner's right in specific partnership property vests in the remaining partner or partners; it does not pass to his or her heirs or next of kin.
Q:
One of the elements of a valid contract is a fair price.
Q:
A(n) ________ is a partnership created with no fixed duration.
Q:
"Consideration" refers to the voluntary consent of all of the parties to a contract.
Q:
A(n) ________ is a partnership created for a fixed duration.
Q:
To maximize profits, the monopolist should produce at whichA) MR = MC. B) MC intersects the demand curve. C) total revenue is maximized. D) total costs are minimized.
Q:
Every contract involves at least three parties.
Q:
While claiming under ________ liability, a plaintiff must name the partnership and all of the partners as defendants in a lawsuit.
Q:
The only requirement of a valid contract is that it be voluntarily entered into.
Q:
General partners have ________ liability for the debts and obligations of the partnership.
Q:
If a contractual promise is not fulfilled, the person who made it may be required to perform the promised act.
Q:
The ________ Act is a model act that codifies general partnership law.
Q:
An ordinary partnership is also known as a(n) ________.
Q:
A party's intent to enter into a contract is judged by their personal, subjective intent or belief.
Q:
Economic efficiency is indicated byA) P = AVC. B) MR = MC. C) P = MR. D) P = MC.
Q:
The dissolution of a general partnership discharges the liability of an outgoing partner for existing partnership debts and obligations.
Q:
Resolving whether a promise should be enforced is a function of contract law.
Q:
The process of liquidating a partnership's assets and distributing the proceeds to satisfy claims against the partnership is known as winding up.
Q:
Some promises are not legally binding.
Q:
Ophelia, an executive with Pharma Drug Distribution, Inc., has to decide whether to market a product that might have undesirable side effects for a small perÂcentage of users. How should Ophelia deÂcide whether to sell the product? How does the standard of ethics that is applied affect this answer?
Q:
A third party who sues to recover on a partnership contract need not name all the general partners in the lawsuit.
Q:
Suppose a perfectly competitive firm faces the following short-run cost and revenue conditions: ATC = $8.00; AVC = $5.00; MC = $8.00; MR = $9.00. The firm shouldA) decrease output. B) increase output.C) increase price. D) continue to produce its current output.
Q:
To assist in detecting illegal bribes, Cut Rite Contractors, Inc., and all U.S. companies, must
a. conceal financial records that reveal past bribes.
b. keep records that "accurately and fairly" reflect financial activities.
c. make bribes through third parties rather than directly to officials.
d. permit payments to foreign officials that are unlawful in that country.
Q:
General partners have unlimited personal liability for the debts and obligations of the partnership.