2005 DECA Ontario December Provincials
Test 872 BUSINESS LAW AND ETHICS 1
1.Companies that do not produce goods but are responsible for making them available or distributing them are considered ______businesses.
A.miningC.service
B.manufacturing D.agricultural
2.One of the ways in which marketing benefits people is by improving their
A.family ties. C.planned economy.
B.community relations. D.standard of living.
3.Jane owns a small business and would order merchandise for her business every two weeks directly from a
A.trade mission. C.retailer.
B.vendor.D.craft union.
4.Calculate a business's monthly cash flow if it has total cash receipts of $9,750, operating expenses of $3,425, and spends $1,700 to purchase inventory and $1,250 to purchase raw materials.
A.$4,625 C.$5,075
B.$3,375 D.$6,325
5.Calculate a business's total cash available if it has a beginning cash balance of $2,300, total cash receipts of $4,900, and cash payments of $3,500.
A.$5,800 C.$3,700
B.$7,200 D.$10,700
6.Which of the following are responsible for the overall operation of a business:
A.Workers C.Managers
B.Investors D.Employees
7.Calculate the amount a business should budget for yearly salaries and wages if it has 12 full-time employees who are each paid $36,000 a year, and five part-time employees who work 20 hours a week and are paid $8 an hour.
A.$432,000 C.$473,600
B.$436,800 D.$483,200
8.Which of the following is an example of business managers dealing unethically with employees:
A.Disciplining a whistle-blower C.Monitoring use of supplies
B.Offering limited part-time options D.Downsizing the workforce
9.John loves sports and would like to own his own sporting goods business. He has set aside some money for investment but has very little time for the day-to-day operations of a business. What type of business ownership would you recommend?
A.Sole proprietorship C.Close corporation
B.Corporation D.General partnership
10.What kind of insurance combines death benefits with a savings and investment account?
A.TermC.Ordinary life
B.Homeowner's D.Liability
11.While putting away her things in the employee break room, Beth laid her jacket over an electric space heater in use in the room. What kind of safety risk did Beth create?
A.Electrical shortC.Shock
B.Housekeeping D.Fire
12.Margo signed a lease to rent a small building for her business. In exchange for the use of the facility, Margo will pay a monthly rent. What component of a legally binding contract does the rent represent?
A.ConsiderationC.Legality
B.Competent parties D.Agreement
13.Jose was injured while loading a pallet of goods for delivery. Which government agency is responsible for investigating the accident?
A.SECC.OSHA
B.CPSC D.FTC
14.What is the global coalition of 135 countries that makes rules governing international trade?
A.World Trade Organization C.European Union
B.General Agreement on Tariffs and TradeD.North American Free Trade Agreement
15.Sales tax is levied only on
A.COD charges. C.goods and shipping costs.
B.goods sold to the final user. D.shipping and handling expenses.
16.In a democracy, laws provide individuals, businesses, and society with a model for appropriate
A.language. C.ideas.
B.opinions. D.conduct.
17.Which of the following is an example of a secondary source of law within the United States:
A.U.S. Congress C.Federal court opinions
B.U.S. ConstitutionD.Restatements of Law
18.A civil lawsuit is initiated by a person who
A.believes his/her rights have been violated.
B.violates a statutory law.
C.compromises his/her code of ethics.
D.hasn't met the requirements for appeal proceedings.
19.A group of citizens determines that enough evidence exists to prosecute a murder. This group is known as the ______jury.
A.grand C.discovery
B.trial D.preliminary
20.A small-business owner sues a local transportation company for $2,650 in damaged merchandise. Which of the following court systems would most likely hear the case:
A.Probate C.State supreme
B.Federal appellate D.Small claims
21.The U.S. government charges the president of a large company with insider trading. Which court system would mostly likely hear the case first:
A.Federal probate C.State appellate
B.State supreme D.Federal district
22.A court of law finds a business executive guilty of a minor offense. Which of the following options is the most likely alternative punishment to a prison sentence that a court might impose:
A.Drug testing C.Probation
B.Volunteer work D.Employment dismissal
23.Which of the following is an example of a legal action that involves tort:
A.A judge sentences a defendant who is found guilty of murder to serve a life sentence in prison.
B.A well-known actor files a lawsuit against a publishing company with charges of libel.
C.A motorist goes to the county courthouse to pay for a parking ticket s/he received.
D.A local public official pays a $ 5,000 fine and serves six months in jail for taking bribes.
24.Which of the following options is the tort duty that requires a person to behave in a reasonable manner:
A.Ethics C.Control
B.Empathy D.Care
25.A customer is injured while walking on the PizzaPalace's icy parking lot. If a judge finds that the restaurant is guilty of tort negligence, the restaurant will most likely have to pay for the customer's
A.traffic fines. C.inheritance taxes.
B.property liens. D.medical bills.
26.Which of the following statements is true regarding the legality of contracts:
A.Judges often make decisions for cases that involve oral contracts between two parties.
B.A contract is legally valid only if it is documented in writing and signed by both parties.
C.The only way to determine the legality of an implied contract is through arbitration.
D.Contingency contracts are not considered legally binding because they are broad in scope.
27.Is a contract enforceable when a 16-year-old agrees to purchase a car from an adult and then decides that s/he doesn't want to buy the vehicle?
A.Yes, the contractual capacity provision prevents anyone from breaching contracts.
B.Yes, if the minor's parent cosigns a contractual agreement to purchase the car.
C.No, since the seller has the option to void any agreement with a minor.
D.No, it is illegal in most countries for minors to enter into contracts with adults.
28.What is a primary factor that a judge considers when s/he determines whether a contract is enforceable?
A.Implied precedent C.Jurisdiction
B.Mutual consideration D.Due process
29.What does a judge consider when s/he is determining whether an oral agreement that is related to a written contract is enforceable?
A.Parol evidence rule C.Proximity of disclosure
B.Commercial disparagement D.Express claim provision
30.When an agent legally acts in the best interests of his/her client, the agent is establishing a(n) ______relationship.
A.legislative C.principal
B.authoritative D.fiduciary
31.When entering a contract with another business, an agent is the party that represents the
A.defendant. C.opposition.
B.principal. D.consultant.
32.Some local, regional, and national governments have laws that protect whistle-blowers from
A.losing their jobs for reporting their employers' wrongdoing.
B.being held liable for the negligent behavior of minors in their care.
C.filing for bankruptcy as a result of poor business investments.
D.having liens placed on their residential property.
33.The rapid evolution of the Internet has made it difficult for worldwide court systems to determine their scope of legal
A.presence. C.precedent.
B.jurisdiction. D.resolution.
34.Which of the following options often creates legal issues that are associated with trademark infringement in relation to the Internet search practices:
A.Meta tags C.Autoresponders
B.Web endorsements D.Opt-in e-mail
35.To avoid disputes about linking its web site with another company's web site, an Internet business might want to
A.apply for a web-linking permit from the appropriate international licensing agent.
B.review the other company's polices about linking terms and conditions of use.
C.consult an estate attorney to develop a web-linking contract with the other company.
D.develop a product disclaimer to reduce the risk of copyright infringement liability.
36.If an e-mail message is declared authentic and usable, it can be presented in a trial as
A.hearsay. C.testimony.
B.evidence. D.perjury.
37.Can a business partnership exist even though there is not a binding agreement and each party does not acknowledge the other party as a partner?
A.Yes, when proof shows that two or more people share profits, a relationship may exist under the partnership by implication provision.
B.Yes, when three or more people initiate a specific transaction that involves the transfer of responsibilities.
C.No, since each party files individual income tax documents separately, there is no way to prove a partnership relationship exists.
D.No, because all partnerships must file the articles of partnership form so the government has a legal record of the relationship.
38.Horizontal restraints of trade are types of antitrust laws designed to protect businesses from competitors that engage in illegal activities such as group boycotting and
A.international trade. C.price fixing.
B.equitable monopolies. D.sponsorship exploitation.
39.A characteristic of intellectual property is that it is
A.elastic. C.inflexible.
B.physical. D.intangible.
40.Obtaining a trademark from the appropriate government agency is one way a business can legally protect its
A.information. C.inventions.
B.image. D.utility.
41.Which of the following business components is most often affected when companies do not take steps to understand their legal requirements and are penalized for misconduct:
A.Distribution channel C.Property value
B.Resource allocation D.Purchasing procedures
42.The process in which the attorneys for both parties interview the potential jurors to assess their qualifications is called
A.cross-examination. C.voir dire.
B.peremptory challenge. D.litmus test.
43.What step of a criminal proceeding provides a defendant the opportunity to officially declare his/her guilt or innocence?
A.Arraignment C.Pretrial conference
B.Indictment D.Appeal
44.What is a primary factor that a judge considers when s/he determines whether a non-compete contract is enforceable?
A.Negotiation C.Injunction
B.Mediation D.Arbitration
45.When considering a dispute, a judge often requires a plaintiff to prove that s/he took reasonable actions to avoid damages related to the breach of contract. This is called the plaintiff's duty to
A.mitigate. C.corroborate.
B.relay. D.disclose.
46.What provision provides confidentiality between a defendant and his/her legal counsel?
A.Petition of discretion C.Implied privacy act
B.Attorney-client privilege D.Practice of judicial classification
47.What type of law regulates issue related to sales contracts?
A.Honorary C.Interstate
B.Commercial D.Bilateral
48.What is a common product disclaimer that does not always legally relieve a seller of product liability in a sales contract?
A.Not returnable C.Inspected by
B.As is D.Checked by
49.Which of the following federal agencies regulates telemarketing:
A.Public Utilities CommissionC.Federal Communications Commission
B.Consumer Product Safety CommissionD.Federal Trade Commission
50.What type of information concerning policies and procedures do employees often extract from an internal business report?
A.Former local competitors C.Industry research data
B.Customer profiles D.New personnel regulations
51.Employees should answer the telephone in a businesslike manner in order to
A.reflect the importance of the job.C.handle a lot of calls at one time.
B.project the image of the business.D.be a candidate for a promotion.
52.Before a salesperson can persuade a customer to upgrade a certain product, the salesperson must first
A.consider the message barriers.C.identify the customer's needs.
B.appeal to the customer's emotions. D.create a desire for the upgrade.
53.A short, written report concerning the present status of a project is called a(n) ______report.
A.progressC.credit
B.analytical D.message
54.Why do businesses often ask employees to write proposals?
A.To provide an answer to a problem C.To share information with coworkers
B.To report on the progress of a project D.To explain the discovery of a new technique
55.At work, you have access to confidential information about other employees' salaries. Some employees have asked you about others' salaries. What should you do?
A.Explain that you can't discuss it.C.Report the employees who ask.
B.Offer to provide salary information.D.Answer their questions.
56.When giving directions for completing specific job tasks, supervisors should try to communicate with
A.body language.C.conciseness.
B.enthusiasm. D.clarity.
57.Asking a satisfied customer to pass on favorable information to your manager is an example of ______behavior.
A.ethicalC.unfair
B.questionable D.aggressive
58.Tying agreements are considered legal except when
A.the supplier alone can provide the products.
B.the supplier employs full-line forcing without allowing competing products.
C.an intermediary is free to carry competing products.
D.a company has just entered the market.
59.Customer satisfaction, employee contentment, and profit can be directly linked to
A.ethical business practices.C.prestigious pricing strategies.
B.paying higher wages than competitors.D.automated distribution centers.
60.A distributor prepared an invoice for a business for 20 cases of goods at $4.75 per case and 35 cases of goods at $6.30 per case. If the discount is 2%, what is the total amount of the invoice after the discount?
A.$312.34C.$309.19
B.$307.45 D.$315.50
61.Dry cleaning is an example of a(n)
A.economic good. C.tangible object.
B.economic service. D.natural resource.
62.What kind of utility is being created when a producer makes clothing from fabric?
A.Time C.Place
B.Form D.Possession
63.Which of the following best defines market price:
A.The highest price consumers will payC.The price that producers would like to charge
B.The price that equalizes supply and demandD.The actual price that prevails at a given time
64.Who provides public goods and services that we all need and use?
A.Government C.Local contractors
B.Businesses D.Natural resources
65.Which of the following is a technique that many businesses use to reward employees whose efficient work habits save money and increase profits:
A.QuotasC.Bonuses
B.Premiums D.Rebates
66.Which of the following is most likely to be a result of competition:
A.Development of new products C.High prices
B.Reduction in product quality D.More monopolies
67.Which of the following is true of employees whose jobs have high depth:
A.They perform only one task.C.They set their own pace.
B.They follow strict guidelines.D.They make very few decisions.
68.A type of labor union made up of workers in a particular occupation is known as a(n) ______union.
A.independent C.industrial
B.craft/tradeD.affiliate
69.The addition of too many workers may cause the marginal product to turn
A.positive.C.negative.
B.upward. D.variable.
70.How will the economy be affected if the inflation rate is 6% and businesses give their employees a 5% raise?
A.Take-home pay remains the same.C.Employment levels fluctuate.
B.Interest rates decrease. D.Purchasing power decreases.
71.A large trade deficit in a nation often leads to ______opportunities.
A.more export C.fewer job
B.fewer import D.more trade
72.Which of the following is a cost of credit:
A.Rebates C.Fidelity bonds
B.Discounts D.Finance charges
73.A major credit-card company has hired a marketing-research firm to conduct a survey regarding the use of consumer credit. Would it be considered ethical to use the database information collected in a direct marketing campaign?
A.Yes, the consumers know surveys are just a way to get information for advertising.
B.No, businesses should not undertake any nonresearch activities involving data collected.
C.No, the database is probably not a reliable source of marketing information.
D.Yes, the credit-card company paid for the research and should be able to use it anyway it wants.
74.One way that businesspeople can develop cultural sensitivity is to
A.revise research techniques. C.acquire foreign language skills.
B.preserve communication methods.D.maintain current leadership styles.
75.Our society has become more complex over time. This has prompted businesses to use teams in order to obtain more
A.time.C.information.
B.materials. D.capital.
76.Businesses whose employees demonstrate a customer-service mindset often benefit from
A.increased costs. C.rapid employee turnover.
B.reduced complaints. D.decreased employee morale.
77.Why is it important for businesses to follow up with customers after the sale to obtain feedback?
A.To prepare testimonialsC.To ask for referrals
B.To develop questionnairesD.To identify problems
78.Gaining the confidence and trust of a customer is a good technique for handling which type of difficult customer?
A.Slow/MethodicalC.Suspicious
B.Disagreeable D.Domineering/Superior
79.Which of the following is an area of customer complaints related to the business's policies and procedures:
A.Providing insufficient product informationC.Selling a defective product
B.Providing unsatisfactory serviceD.Refusing to accept personal checks
80.Information about employees' salaries including deductions for health coverage, pension plan, and stock options is maintained in the business's
A.personnel records.C.expense reports.
B.operating budget. D.accounting system.
81.A current employee who is asked to help orient a new employee will be serving as the new employee's
A.manager.C.sponsor.
B.apprentice. D.trainee.
82.Which of the following factors affect the content of a job orientation:
A.Time, instructional methods, and audience C.Money, resources, and facilities
B.Time, facilities, and instructional methods D.Money, time, and audience
83.Companies often improve the skills of the support staff by
A.spending excess operating funds. C.providing training programs.
B.providing jobs for unemployed teachers. D.generating goodwill in the community.
84.Which of the following techniques would help a business to identify its training and development needs:
A.CoachingC.Assessment
B.Implementation D.Simulation
85.The two approaches supervisors may take toward disciplinary problems are
A.remediation and disciplinary suspension.
B.peer counseling and supervisory discipline.
C.preventive discipline and corrective discipline.
D.preventive discipline and corrective counseling.
86.Five employees regularly use the business's copy machine to make copies for their personal use. If they each make 25 copies a week and the cost of each copy is 3 cents, calculate the amount they are adding to the business's expense in a year.
A.$205C.$195
B.$175 D.$225
87.Last year, a business had sales of $690,500 and expenses of $415,825. What should the business budget for income for the coming year if it anticipates a 7% increase in sales and a 4% increase in expenses?
A.$315,525C.$274,675
B.$290,882 D.$306,377
88.Most company budgets are based on
A.sales. C.net profit.
B.expenses. D.gross profit.
89.Which of the following is a way in which government supports the growth of business: