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Business Law Test Ch. 13-15 Employment Law

True/False
Indicate whether the statement is true or false.
 

 1. 
An agent has the authority to act in place of the principal.
 

 2. 
Some agents are employees.
 

 3. 
Agency relationships are usually formed when a principal and an agent agree to the arrangement.
 

 4. 
Minors cannot be principals.
 

 5. 
An agent owes a principal the duty of obedience.
 

 6. 
Agents are held liable for all mistakes made on behalf of the principal.
 

 7. 
Good faith means to deal honestly with another party with no intent to seek advantage or to defraud.
 

 8. 
An agency may be terminated by acts of the parties.
 

 9. 
A proprietor can be held liable for the torts of an independent contractor.
 

 10. 
Agents keep the principal’s money safe and separate by using a trust account.
 

 11. 
When employees are acting within the scope of employment, they are usually held liable for the actions of their employers.
 

 12. 
The doctrine of employment-at-will is based on the principle that an employer or employee should be able to end an employment relationship at any time without penalty.
 

 13. 
The Employee Polygraph Protection Act prevents employers from using lie detector tests to screen employees except in certain cases.
 

 14. 
The law protects workers from being fired based solely on their age.
 

 15. 
Most U.S. employment laws apply to citizens who are working for American companies overseas.
 

 16. 
The purpose of the EPA is to inspect workplaces at random to ensure employees are safe.
 

 17. 
The Fair Labor Standards Act regulates the employment of minors.
 

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 18. 
The person the agent deals with on behalf of the principal is called the
a.
coagent.
c.
servant.
b.
proprietor.
d.
third party.
 

 19. 
An agency by circumstance, created by law, is called
a.
negligent hiring.
c.
independent contracting.
b.
agency by estoppel.
d.
ratification.
 

 20. 
The manager of a grocery store, who has been given authority to perform any act within the scope of that store is known as a
a.
special agent.
c.
statutory agent.
b.
general agent.
d.
would-be agent.
 

 21. 
The agency relationship involves three parties:
a.
the principal, the agent, and the third party.
b.
the principal, the master, and the servant.
c.
the genuine agent, the special agent, and the contractor.
d.
the independent contractor, the master, and the servant.
 

 22. 
The principal cannot be held liable for anything done by the
a.
general agent.
c.
subagent.
b.
agent’s agent.
d.
special agent.
 

 23. 
Lawyers, stockbrokers, insurance agents, and real estate brokers are all examples of
a.
special agents.
c.
general agents.
b.
licensed agents.
d.
estoppel agents.
 

 24. 
An agent's obligation to deal honestly with another party is known as
a.
mutual agreement.
c.
habeas corpus.
b.
good faith.
d.
implied authority.
 

 25. 
Which of the following is NOT a fiduciary duty that an agent owes a principal?
a.
good faith
c.
hope
b.
obedience
d.
loyalty
 

 26. 
If an agent is authorized to sell a car for a person, but the car is totaled in an accident, then
a.
the agency relationship is terminated.
b.
the agent is held liable for the car.
c.
the principal is held liable for the car.
d.
the agency is terminated by mutual consent.
 

 27. 
A broad legal principle stating that people may not do anything that injures society at large is the principle of
a.
public policy.
c.
employment-at-will.
b.
wrongful discharge.
d.
civic protection.
 

 28. 
Under Title VII of the Civil Rights Act of 1964, interviewers MAY ask applicants questions about
a.
race.
c.
marital status.
b.
religion.
d.
work experience.
 

 29. 
The Immigration Reform Act makes employers responsible for
a.
ensuring that all employees have written work permits.
b.
hiring 5% of their workforce from outside the United States.
c.
keeping a special file on all nonimmigrant visa holders.
d.
verifying the identity of all employees.
 

 30. 
Indirect discrimination occurs when an employer makes a hiring decision based on
a.
a qualification that is related to job performance.
b.
the race or sex of the applicant.
c.
a qualification that is not related to job performance.
d.
the age of the applicant.
 

 31. 
A government program providing continuing income to workers and their dependents when they retire or are disabled is called the
a.
Social Security Act.
b.
Employment Retirement Income Security Act.
c.
Unemployment Compensation Act.
d.
Family and Medical Leave Act.
 

 32. 
When an employer has said, written, or done something that leads an employee to reasonably believe he or she is not an employee-at-will, it is called a(n)
a.
public policy tort.
c.
implied covenant.
b.
implied contract.
d.
promissory estoppel.
 

 33. 
Which of the following is NOT a responsibility of OSHA?
a.
inspecting workplaces at random
b.
investigating written employee complaints
c.
investigating workplace disasters
d.
regulating wages, hours, and benefits
 

 34. 
Work-related accidents and death on the job became a serious problem 
a.
when machines were introduced into industry.
b.
as workers began to increase the number of hours worked per day.
c.
before unions began to protect the workers.
d.
when employees were required to bring their own tools to the worksite.
 

Matching
 
 
Match each term with its definition.
a.
agency
f.
independent contractor
b.
agent
g.
general agent
c.
principal
h.
special agent
d.
apparent authority
i.
agency by estoppel
e.
servant
j.
agent’s agent
 

 35. 

 When a principal unintentionally leads a third party to believe that someone has authority to act as an agent
 

 36. 

 A person who has been given authority to perform any act within the scope of a business
 

 37. 

 One person who represents another person in a business transaction with a third party
 

 38. 

 The relationship that involves an agent, a principal, and a third party
 

 39. 

 An agent who has been given the authority to conduct a particular transaction or to perform a specified act for his or her principal
 

 40. 

 A person who appoints and directs the activities of an agent
 

 41. 

 A person who contracts to do a piece of work according to his or her own methods and without being subject to the control of his or her employer except as to the result of the work
 

 42. 

 An agent who is appointed by another agent without the principal’s permission
 
 
Match each term with its definition.
a.
employment-at-will
f.
public policy tort
b.
union
g.
implied covenant
c.
collective bargaining
h.
employment contract
d.
disparate treatment
i.
unemployment compensation
e.
disparate impact
j.
workers’ compensation
 

 43. 

 A process in which union and management representatives work together on such issues as wages, working conditions, and hiring policies
 

 44. 

 A legal theory that permits discharged employees to bring a wrongful discharge suit against a former employer based on the fact that it hurt the population at large
 

 45. 

 Can prevent people from leaving a job whenever they want and working for whomever they want
 

 46. 

 An insurance program that provides income for workers who are injured on the job
 

 47. 

 A doctrine that states an employer is permitted to discharge an employee at any time, for any or no reason, with or without notice
 

 48. 

 A system of government payments to people who are out of work and looking for a job
 

 49. 

 A legal argument that says any employment relationship is based on a promise that the employer and employee will be fair and honest with each other
 

 50. 

 An organization of employees that is formed to promote the welfare of its members
 



 
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