Decide whether the following statements are true or false (each correct answer is worth 1%):

A,   The Articles of Confederation established a confederal form of government.

B,   Under the U.S. Constitution, each branch of government limits some actions of the other branches.

C,   The supremacy clause of the Constitution provides that a state law is in­valid when it directly conflicts with a federal law.

D,   A sole proprietor may own and manage any type of business.

E,   A franchisor is never liable for the act of a fran­chisee's employee.

      F,   A limited liability company is a legal entity apart from its owners.

     G,   In a family limited liability partnership, only persons related to each other may be partners.

     H,  The law of the state of in­corporation may restrict the implied powers of a corporation.

     I,    An agency relationship does not exist outside employer-employee relationships.

    J,     There are no exceptions to the employment-at-will doctrine.

Choose the correct answer for the following statements (each correct answer is worth 3%):

1.      Under the Constitution, the legislative branch of the government

a.       administers the laws.

b.      enforces the laws.

c.       interprets the laws.

d.      makes the laws.

2.      Colorado enacts a statute that bans the distribution of anonymous politi­cal leaflets. A court would likely hold this 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 state interests.

3.      Direct Mail Sales, Inc., regularly advertises its products. Under the First Amendment, with respect to noncommercial speech, these ads are given

a.       equal protection.

b.      less protection.

c.       more protection.

d.      no protection.

4.      Instead of setting up a business to market her own products, Krissy con­sid­ers entering into a distributorship franchise with Little Breweries Corporation. This involves the transfer of

a.       a license.

b.      a trade name.

c.       the formula to make a certain product.

d.      the ownership of the business.

5.      Euro Autos & Trucks, Inc., licenses Fancy Vehicles Corporation, an auto­mobile dealership, to sell its products. This is

a.       a chain-style franchise.

b.      a distributorship franchise.

c.       a manufacturing franchise.

d.      no franchise.

6.      Energy Resources, LLC, is a limited liability company. Rather than dis­tribute its profits to its members, Energy wants to reinvest the profits in its business. For this reason, Energy may prefer to be taxed as

a.       a corporation.

b.      a partnership.

c.       a sole proprietorship.

d.      a syndicate.

7.      Finn and Glenda want to form and do business as Hobby Crafts Corporation. A corporation is a legal entity created and recognized by

a.       a central federal administrative agency.

b.      a city or county clerk's office.

c.       an artificial legal person.

d.      state law.

8.      Dizzy is not Edwina's agent but enters into a contract with Frida on Edwina's behalf. Edwina later contacts Frida to approve the contract. This is

a.         an agency by agreement.

b.         an agency by estoppel.

c.         an agency by ratification.

d.         not the creation of an agency relationship.

 9. Frida is an employee of Green Recycled Products Company. A state statute protects Frida from Green's retaliation if Frida reports to state officials, or others, that Green is involved in unsafe or illegal activity. With respect to the employment-at-will doctrine, this is

a.         an example of the doctrine.

b.         an exception based on contract theory.

c.         an exception based on public policy.

d.         an exception based on tort theory.

10. Super Sales Corporation provides Tyrone and other salespersons with meals and lodging when they are on the road. Under federal law, the term wages may include, besides pay, the reasonable cost to Standard of fur­nishing Tyrone with

a.         lodging and meals.

b.         lodging only.

c.         meals only.

d.         neither lodging nor meals.

4. Answer the following questions (each correct answer is worth 10%):

A,    Ewa, the owner of First-Rate Bild-It, is a sole proprietor. What are the chief characteristics, advantages, and disadvantages of this form of busi­ness organization? Ewa wants to obtain additional capital to expand First-Rate, but she does not want to lose control of the firm. As a sole proprie­tor, what is her best option to attain these goals?

 B, What does the Equal Employment Opportunity Commission do? 

C, How does a court decide whether it may exercise jurisdiction over a foreign or alien corpora­tion?  ? 

 D, What is sexual harassment and under what circumstances might an employer be liable?