Business Law Final Exam Questions With Accurate Answers
Congress enacts a statute, the Federal Deposit Insurance Corporation (an administrative agency) issues
rules, the Southeast Financial Institutions Association (a private organizations) issues instructions, South
Valley Bank posts a memo with orders for its employees, and Tina tells her co-worker about a recent
news story. Sources of law include
a. the instructions issued by private associations.
b. the orders posted by employers.
c. the rules issued by federal administrative agencies.
d. the stories released by news agencies. - correct answer -c
The Pennsylvania legislature enacts a state law that violates the U.S. Constitution. This law can be
enforced by
a. no one.
b. the federal government only.
c. the state of Pennsylvania only.
d. the United States Supreme Court only - correct answer -a
Smithy Saddlery is a saddle shop subject to the laws of New York. In New York, the highest-ranking
(superior) law is
a. a case decided by the New York Court of Appeals.
b. a rule created by a New York state administrative agency.
c. a provision in the New York constitution.
d. a statute enacted by the New York legislature. - correct answer -c
In Lewis v. Motor City Cars & Trucks, a state supreme court held that a minor could cancel a contract for
the sale of a car. A lower court in the same state may depart from this precedent if the court decides
that the precedent
a. is incorrect or inapplicable.
b. is not in line with the judge's personal values.
c. would lead to unintended consequences.
d. would not bring about the result the judge prefers. - correct answer -a
Eliza is a state court judge. Flora appears in a case in Eliza's court, claiming that Glover breached a
contract. Which of the following actions may Eliza take?
a. Award damages or issue a decree of specific performance
b. Imprison Glover, but not Flora
c. Imprison Flora, but not Glover
d. Order the parties to pay Eliza to render a favorable ruling - correct answer -a
Starlight Café brings a suit, seeking a remedy at law. A remedy at law is
a. the payment of money or property as compensation for damages.
b. a decree of specific performance. c. a judicial proceeding for the resolution of a dispute.
d. an injunction - correct answer -a
,Leona enters into a contract with Munchies Bakery to cater a sales conference. When the conference is
postponed indefinitely, Leona asks a court to cancel the contract and return the parties to the positions
that they held before its formation. This request involves
a. specific performance.
b. an injunction.
c. rescission.
d. an action that the court cannot order. - correct answer -c
Maggie and Nate enter into a contract for the sale of a car, but Nate later refuses to deliver the car.
Maggie asks a court to order Nate to perform as promised. Ordering a party to perform what was
promised is
a. specific performance.
b. damages.
c. rescission.
d. beyond the court's authority. - correct answer -a
Chelsea is a state court judge. Like judges in most state courts, in a particular case, she may grant
a. a remedy at law only.
b. a remedy in equity or a remedy at law, but not both.
c. a remedy in equity and a remedy at law.
d. a remedy in equity only. - correct answer -c
Jane enters into a contract with Jill to provide 100 roses for a dinner party. Jane fails to deliver the roses.
Jill initiates a suit against Jane, asking the court to order Jane to deliver the roses. Jill is
a. the plaintiff.
b. the defendant.
c. the binding authority.
d. the persuasive authority. - correct answer -a
Tami's Tasty Tacos, a fast food outfit, files a suit against the state of Texas, claiming that a Texas state
law violates the commerce clause. The court will agree if the statute imposes a substantial burden on
a. a local government.
b. interstate commerce.
c. noneconomic activity.
d. the state. - correct answer -b
Congress enacts a law prohibiting toys made in China from being sold in the United States. The Hawaii
state legislature enacts a law allowing the sale of Chinese-made toys. Hawaii's law will most likely be
struck down under
a. the commerce clause.
b. the equal protection clause.
c. the due process power.
d. the supremacy clause. - correct answer -d
Don, a U.S. citizen, is the owner of Egrets Unlimited, Inc. Egret's competitors include Feathered Friends
Company (FFC), which is owned by Greg and Huey. The Bill of Rights embodies a series of protections for
Don against types of interference by
a. FFC and its other competitors only. b. FFC, Greg, Huey, others, and the government.
,c. Greg, Huey, and other private individuals only.
d. the government only. - correct answer -d
Martin, a U.S. citizen, feels that a recently enacted federal law is unfair. He assembles a group of friends
and they write a petition to the government. Martin and friends then stand quietly in front of the White
House with signs declaring their belief that the law is unfair. Under the First Amendment, Martin has a
right to
a. petition the government, but not to assemble a group peaceably.
b. assemble peaceably, but not to petition the government.
c. both petition the government and assemble peaceably.
d. neither petition the government nor assemble peaceably. - correct answer -c
Mary creates a t-shirt design that expresses her support for a presidential candidate and distributes t-
shirts to all her friends. The t-shirts are an example of
a. unprotected speech.
b. controlled speech.
c. symbolic speech.
d. illegal speech. - correct answer -c
George burns an American flag in his backyard. He films his actions and posts the video on
YouTube.com. George's actions are
a. expressly prohibited by the U.S. Constitution.
b. protected by the First Amendment of the U.S. Constitution.
c. considered to be a form of treason.
d. illegal in some states. - correct answer -b
Reusable Energy Corporation regularly expresses opinions on political issues. Under the First
Amendment, corporate political speech is
a. discouraged.
b. forbidden.
c. protected.
d. required. - correct answer -c
California enacts a statute to ban advertising in "bad taste." This statute would likely be held by a court
to be a. an unconstitutional restriction of speech.
b. constitutional under the First Amendment.
c. justified by the need to protect individual rights.
d. necessary to protect national interests. - correct answer -a
Julia is a U.S. citizen. She establishes a Web site that posts threatening messages about celebrities. Her
Web site is
a. protected by the First Amendment. b. not protected by the First Amendment.
c. protected by the Fifth Amendment. d. protected by the Tenth Amendment. - correct answer -b
A Massachusetts state statute imposes a prison term, without a trial, on all street performers who
operate in certain areas. A court would likely review this statute under the principles of
a. the commerce clause.
b. the equal protection clause.
, c. the due process clause.
d. the First Amendment. - correct answer -c
Justice For All, a political organization, files a claim to challenge a Colorado statute that limits the liberty
of all persons to broadcast "annoying" radio commercials. This claim is most likely based on the right to
a. equal protection of the law.
b. indictment.
c. procedural due process.
d. substantive due process. - correct answer -d
Justin wants to file a suit against Mikayla. For a court to hear the case a. Mikayla must agree.
b. the court must have jurisdiction.
c. the court must issue a deposition. d. the parties must own property. - correct answer -b
Megan, a resident of Ohio, runs a red light in Texas and hits Sarah, a Texas resident. Sarah files suit
against Megan. The statute that allows the Texas court to exercise jurisdiction over Megan is called a(n)
a. long arm statute.
b. in personam statute.
c. in rem statute.
d. out-of-state jurisdiction statute. - correct answer -a
Laney is a resident of Maine. Delacorte is a Canadian. They dispute the ownership of Petite Isle, an island
in North Rapids River on the border between Canada and the United States. The diversity of the parties'
citizenship could serve as a basis for a. federal jurisdiction.
b. general jurisdiction.
c. limited jurisdiction.
d. universal jurisdiction - correct answer -a
Fresh Harvest Company, which is based on Georgia, packages and sells vegetables. Jack, who is a
resident of North Carolina, buys a Fresh Harvest product, eats it, and suffers severe food poisoning. Jack
wants to file a suit against Fresh Harvest. The diversity of citizenship between these parties means that
a. federal and state courts have concurrent jurisdiction.
b. federal courts have exclusive jurisdiction.
c. no court has jurisdiction.
d. state courts have exclusive jurisdiction. - correct answer -a
Sandy, a resident of Illinois, wants to file suit against Carl, a resident of Kansas, over Carl's failure to pay
Sandy for work on his house. The amount in dispute is $15,000. Under diversity of citizenship
requirements a. no court can exercise jurisdiction. b. a state court cannot take jurisdiction because the
amount in controversy is less than $25,000.
c. a federal court cannot take jurisdiction because the amount in controversy is more than $10,000.
d. a federal court cannot take jurisdiction because the amount in controversy is less than $75,000. -
correct answer -d
Jack and Jill, citizens of Vermont, are involved in a case related to the adoption of their child. The
Vermont state courts
a. have concurrent jurisdiction with federal courts over this case.
b. have original jurisdiction over this case.
Congress enacts a statute, the Federal Deposit Insurance Corporation (an administrative agency) issues
rules, the Southeast Financial Institutions Association (a private organizations) issues instructions, South
Valley Bank posts a memo with orders for its employees, and Tina tells her co-worker about a recent
news story. Sources of law include
a. the instructions issued by private associations.
b. the orders posted by employers.
c. the rules issued by federal administrative agencies.
d. the stories released by news agencies. - correct answer -c
The Pennsylvania legislature enacts a state law that violates the U.S. Constitution. This law can be
enforced by
a. no one.
b. the federal government only.
c. the state of Pennsylvania only.
d. the United States Supreme Court only - correct answer -a
Smithy Saddlery is a saddle shop subject to the laws of New York. In New York, the highest-ranking
(superior) law is
a. a case decided by the New York Court of Appeals.
b. a rule created by a New York state administrative agency.
c. a provision in the New York constitution.
d. a statute enacted by the New York legislature. - correct answer -c
In Lewis v. Motor City Cars & Trucks, a state supreme court held that a minor could cancel a contract for
the sale of a car. A lower court in the same state may depart from this precedent if the court decides
that the precedent
a. is incorrect or inapplicable.
b. is not in line with the judge's personal values.
c. would lead to unintended consequences.
d. would not bring about the result the judge prefers. - correct answer -a
Eliza is a state court judge. Flora appears in a case in Eliza's court, claiming that Glover breached a
contract. Which of the following actions may Eliza take?
a. Award damages or issue a decree of specific performance
b. Imprison Glover, but not Flora
c. Imprison Flora, but not Glover
d. Order the parties to pay Eliza to render a favorable ruling - correct answer -a
Starlight Café brings a suit, seeking a remedy at law. A remedy at law is
a. the payment of money or property as compensation for damages.
b. a decree of specific performance. c. a judicial proceeding for the resolution of a dispute.
d. an injunction - correct answer -a
,Leona enters into a contract with Munchies Bakery to cater a sales conference. When the conference is
postponed indefinitely, Leona asks a court to cancel the contract and return the parties to the positions
that they held before its formation. This request involves
a. specific performance.
b. an injunction.
c. rescission.
d. an action that the court cannot order. - correct answer -c
Maggie and Nate enter into a contract for the sale of a car, but Nate later refuses to deliver the car.
Maggie asks a court to order Nate to perform as promised. Ordering a party to perform what was
promised is
a. specific performance.
b. damages.
c. rescission.
d. beyond the court's authority. - correct answer -a
Chelsea is a state court judge. Like judges in most state courts, in a particular case, she may grant
a. a remedy at law only.
b. a remedy in equity or a remedy at law, but not both.
c. a remedy in equity and a remedy at law.
d. a remedy in equity only. - correct answer -c
Jane enters into a contract with Jill to provide 100 roses for a dinner party. Jane fails to deliver the roses.
Jill initiates a suit against Jane, asking the court to order Jane to deliver the roses. Jill is
a. the plaintiff.
b. the defendant.
c. the binding authority.
d. the persuasive authority. - correct answer -a
Tami's Tasty Tacos, a fast food outfit, files a suit against the state of Texas, claiming that a Texas state
law violates the commerce clause. The court will agree if the statute imposes a substantial burden on
a. a local government.
b. interstate commerce.
c. noneconomic activity.
d. the state. - correct answer -b
Congress enacts a law prohibiting toys made in China from being sold in the United States. The Hawaii
state legislature enacts a law allowing the sale of Chinese-made toys. Hawaii's law will most likely be
struck down under
a. the commerce clause.
b. the equal protection clause.
c. the due process power.
d. the supremacy clause. - correct answer -d
Don, a U.S. citizen, is the owner of Egrets Unlimited, Inc. Egret's competitors include Feathered Friends
Company (FFC), which is owned by Greg and Huey. The Bill of Rights embodies a series of protections for
Don against types of interference by
a. FFC and its other competitors only. b. FFC, Greg, Huey, others, and the government.
,c. Greg, Huey, and other private individuals only.
d. the government only. - correct answer -d
Martin, a U.S. citizen, feels that a recently enacted federal law is unfair. He assembles a group of friends
and they write a petition to the government. Martin and friends then stand quietly in front of the White
House with signs declaring their belief that the law is unfair. Under the First Amendment, Martin has a
right to
a. petition the government, but not to assemble a group peaceably.
b. assemble peaceably, but not to petition the government.
c. both petition the government and assemble peaceably.
d. neither petition the government nor assemble peaceably. - correct answer -c
Mary creates a t-shirt design that expresses her support for a presidential candidate and distributes t-
shirts to all her friends. The t-shirts are an example of
a. unprotected speech.
b. controlled speech.
c. symbolic speech.
d. illegal speech. - correct answer -c
George burns an American flag in his backyard. He films his actions and posts the video on
YouTube.com. George's actions are
a. expressly prohibited by the U.S. Constitution.
b. protected by the First Amendment of the U.S. Constitution.
c. considered to be a form of treason.
d. illegal in some states. - correct answer -b
Reusable Energy Corporation regularly expresses opinions on political issues. Under the First
Amendment, corporate political speech is
a. discouraged.
b. forbidden.
c. protected.
d. required. - correct answer -c
California enacts a statute to ban advertising in "bad taste." This statute would likely be held by a court
to be a. an unconstitutional restriction of speech.
b. constitutional under the First Amendment.
c. justified by the need to protect individual rights.
d. necessary to protect national interests. - correct answer -a
Julia is a U.S. citizen. She establishes a Web site that posts threatening messages about celebrities. Her
Web site is
a. protected by the First Amendment. b. not protected by the First Amendment.
c. protected by the Fifth Amendment. d. protected by the Tenth Amendment. - correct answer -b
A Massachusetts state statute imposes a prison term, without a trial, on all street performers who
operate in certain areas. A court would likely review this statute under the principles of
a. the commerce clause.
b. the equal protection clause.
, c. the due process clause.
d. the First Amendment. - correct answer -c
Justice For All, a political organization, files a claim to challenge a Colorado statute that limits the liberty
of all persons to broadcast "annoying" radio commercials. This claim is most likely based on the right to
a. equal protection of the law.
b. indictment.
c. procedural due process.
d. substantive due process. - correct answer -d
Justin wants to file a suit against Mikayla. For a court to hear the case a. Mikayla must agree.
b. the court must have jurisdiction.
c. the court must issue a deposition. d. the parties must own property. - correct answer -b
Megan, a resident of Ohio, runs a red light in Texas and hits Sarah, a Texas resident. Sarah files suit
against Megan. The statute that allows the Texas court to exercise jurisdiction over Megan is called a(n)
a. long arm statute.
b. in personam statute.
c. in rem statute.
d. out-of-state jurisdiction statute. - correct answer -a
Laney is a resident of Maine. Delacorte is a Canadian. They dispute the ownership of Petite Isle, an island
in North Rapids River on the border between Canada and the United States. The diversity of the parties'
citizenship could serve as a basis for a. federal jurisdiction.
b. general jurisdiction.
c. limited jurisdiction.
d. universal jurisdiction - correct answer -a
Fresh Harvest Company, which is based on Georgia, packages and sells vegetables. Jack, who is a
resident of North Carolina, buys a Fresh Harvest product, eats it, and suffers severe food poisoning. Jack
wants to file a suit against Fresh Harvest. The diversity of citizenship between these parties means that
a. federal and state courts have concurrent jurisdiction.
b. federal courts have exclusive jurisdiction.
c. no court has jurisdiction.
d. state courts have exclusive jurisdiction. - correct answer -a
Sandy, a resident of Illinois, wants to file suit against Carl, a resident of Kansas, over Carl's failure to pay
Sandy for work on his house. The amount in dispute is $15,000. Under diversity of citizenship
requirements a. no court can exercise jurisdiction. b. a state court cannot take jurisdiction because the
amount in controversy is less than $25,000.
c. a federal court cannot take jurisdiction because the amount in controversy is more than $10,000.
d. a federal court cannot take jurisdiction because the amount in controversy is less than $75,000. -
correct answer -d
Jack and Jill, citizens of Vermont, are involved in a case related to the adoption of their child. The
Vermont state courts
a. have concurrent jurisdiction with federal courts over this case.
b. have original jurisdiction over this case.
