Question: Hartley’s F-max test is used to evaluate the homogeneity of variance assumption. What decision should we make in this test to satisfy this assumption?

Answer Choices:
Reject the null hypothesis (The two population variances are equal).
Fail to reject the null hypothesis (The two population variances are equal).
Reject the null hypothesis (The two population variances are different).
Fail to reject the null hypothesis (The two population variances are different).

Answer: Fail to reject the null hypothesis (The two population variances are equal).

Question: Participants are asked to rate their preference for two competing products. After exposure to advertising for one of the products, their preferences are measured again to determine if the advertising had any effect on their choices. Most likely, this is an example if:

Answer Choices:
A within-subjects design.
A repeated-measures design for two independent samples.
An independent-measures design for one sample.
An independent-measures design for two samples.

Answer: A within-subjects design.

Question: Bill is injured while standing on the corner of Hollyhock and Vine when Mia’s new Hog speeds out of control because of a defective part. In most jurisdictions, Bill:

Answer Choices:
can sue the motorcycle manufacturer even though he was only a bystander.
can sue the motorcycle retailer because his injuries are personal injuries.
cannot sue the motorcycle manufacturer because the lemon laws resolve such issues.
cannot sue the motorcycle manufacturer because there is no privity of contract.

Answer: can sue the motorcycle manufacturer even though he was only a bystander.

Question: A buyer who properly rejects goods:

Answer Choices:
can do so by sending the goods back in any manner.
must notify the seller of the rejection within a reasonable time.
must pay the cost of returning the rejected goods.
None of the above.

Answer: must notify the seller of the rejection within a reasonable time.

Question: Which of the following would not be personally liable for the debts of the business?

Answer Choices:
A sole proprietor.
A partner in a general partnership.
A limited partner in a limited liability partnership.
A general partner in a limited partnership.

Answer: A limited partner in a limited liability partnership.

Question: Mike sold his car to Beth, who was to pick the car up at Mike’s house by 12:00 noon on September 1. Mike was at his house waiting for Beth but she was late. In fact, when Beth arrived she discovered Mike’s home and the car destroyed by a fire that started at 1:00 p.m. The risk of loss falls on:

Answer Choices:
Mike because Beth had not taken possession of the car.
Beth because Mike was ready, willing, and able to tender the car at 12:00 noon.
Beth because under the UCC, the buyer bears the risk of loss.
Mike as he had possession of the car.

Answer: Beth because Mike was ready, willing, and able to tender the car at 12:00 noon.

Question: Kayla and Marshall formed a partnership. Marshall incurred a debt in the ordinary course of the partnership business. If the debt is not paid, the creditor may sue:

Answer Choices:
only Marshall.
only the partnership.
the partnership and the partners together or in separate lawsuits or in any combination.
only Marshall and the partnership in a lawsuit together or the creditor loses any right to sue the partnership.

Answer: the partnership and the partners together or in separate lawsuits or in any combination.

Question: Rayco Ski Shop purchased 500 pairs of skis from Skitron. Rayco is located in Colorado, Skitron’s business is in Tennessee. The purchase order included the following term: “F.O.B. Colorado.” The contract makes no mention of risk of loss or title. The contract can be described as a:

Answer Choices:
shipment contract.
destination contract.
bulk transfer.
sale on approval.

Answer: destination contract.

Question: Jill was a limited partner in a retail business that was sued by a customer who fell in the store. The customer claimed the business was negligent in caring for its floors. Which statement best describes Jill’s potential liability?

Answer Choices:
Jill has no potential liability to the customer.
Jill can be held personally liable to the customer since she is a partner.
Jill can only be liable to the amount of her investment.
Jill is personally liable, but the woman must first collect from the general partners before collecting from Jill.

Answer: Jill can only be liable to the amount of her investment.

Question: A manager used her position in the company to develop a new business the company might have pursued. This is a breach of the:

Answer Choices:
duty of care.
duty of non-competition.
duty of loyalty.
duty of recognition.

Answer: duty of loyalty.

Question: In which of the following situations is the seller a merchant under Article 2 of the UCC?

Answer Choices:
Paul, a full-time college student, sold his textbooks to State Bookstore.
Ronald, a part-time college student and full-time father, sold his textbooks to a friend.
Zompa Inc., a toy manufacturer, contracted to sell dolls to ToyTon Department Store.
In all of the above situations the seller is a merchant.

Answer: Zompa Inc., a toy manufacturer, contracted to sell dolls to ToyTon Department Store.

Question: A requirements contract is a contract:

Answer Choices:
in restraint of trade.
in which the seller provides all of the goods that the buyer needs.
in which the buyer purchases all of the goods that the seller produces.
in which a party must buy a product it does not want in order to be allowed to buy a product it requires.

Answer: in which the seller provides all of the goods that the buyer needs.

Question: Which of the following is true regarding an open price term?

Answer Choices:
It makes the contract unenforceable.
The price may be fixed by the seller.
The price is the “reasonable” price at the time of delivery.
The price is set by the buyer.

Answer: The price is the “reasonable” price at the time of delivery.

Question: A baseball team ordered 500 wooden baseball bats from Bats, Inc., for delivery on June 1. On May 15, the ball team received 500 aluminum bats on the contract. As of May 16, Bats:

Answer Choices:
may cure before June 1.
has breached the contract and is liable for damages.
has breached the contract only if the baseball team rejects the goods.
may cure if done within a reasonable time before or after June 1.

Answer: may cure before June 1.

Question: Which of the following statements could create an express warranty?

Answer Choices:
“This is the best car available in town.”
“This motorcycle will double in value in the next ten years.”
“These tires have 10,000 miles on them.”
“This antique is quite a bargain.”

Answer: “These tires have 10,000 miles on them.”

Question: Which of the following contracts requires a writing under the UCC, Article 2?

Answer Choices:
Jeremy, a full-time student, sold his snow blower to a friend for $450.
Jeremy, a full-time student, purchased a used computer from Office Place for $300.
A toy manufacturer contracted to sell dolls valued at $10,000 to a department store.
Tobias Department Store contracted to sell Jeremy a $400 coat.

Answer: A toy manufacturer contracted to sell dolls valued at $10,000 to a department store.

Question: Ron is the business agent for Kansas Sunshine, a rock band. He is also the agent for another popular Midwestern rock group, City Sand. Ron negotiates a deal with a Kansas City promoter to have City Sand play after a professional football game. The promoter was willing to pay $250,000 for both groups to play after the game; however, Ron talked her into booking just City Sand for $175,000. Given his contract with City Sand, Ron made more money under this arrangement. Has Ron violated his fiduciary duty to Kansas Sunshine?

Answer Choices:
Yes, it appears that Ron put his own interests ahead of his principal’s interests.
Yes, Ron cannot, under any circumstances, act as an agent for both groups.
Both a and b are correct.
Neither a nor b is correct since it is very common for rock band agents to represent several groups at the same time.

Answer: Yes, it appears that Ron put his own interests ahead of his principal’s interests.

Question: Jenny, a director of a corporation, made the difficult decision to shut down one of the company’s manufacturing plants in the state of Ohio. When challenged about her decision, the court ruled she had acted in good faith and that the business judgment rule applied. As such:

Answer Choices:
Jenny will not be held personally liable for a decision that results in money losses to the company.
Jenny’s decision will be reviewed by a court.
Jenny is immune from a lawsuit.
Jenny must resign from the board.

Answer: Jenny will not be held personally liable for a decision that results in money losses to the company.

Question: The doctrine of respondeat superior:

Answer Choices:
applies to both employees and independent contractors.
applies to employees but not independent contractors.
applies to independent contractors but not employees.
does not apply to either employees or independent contractors.

Answer: applies to employees but not independent contractors.