This document appears to be a practice exam on contract law for a course at the University of Sto-Tomas – Legazpi. It contains 25 multiple choice questions testing understanding of key concepts in contract law, including essential elements of a contract, types of consent, mistake, coercion, fraud, validity and objects of contracts. The questions cover topics like offer and acceptance, capacity to contract, void and voidable contracts, and interpretation of contractual elements and defects.
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RFBT Quiz #2 - Contracts
This document appears to be a practice exam on contract law for a course at the University of Sto-Tomas – Legazpi. It contains 25 multiple choice questions testing understanding of key concepts in contract law, including essential elements of a contract, types of consent, mistake, coercion, fraud, validity and objects of contracts. The questions cover topics like offer and acceptance, capacity to contract, void and voidable contracts, and interpretation of contractual elements and defects.
Multiple Choice Identify the choice that best completes the statement or answers the question.
____ 1. The following are the essential elements of contract, except:
a. Consent of the contracting parties b. Object certain which is the subject matter of the contract c. Price which must be stated in acceptable legal currency d. Cause of the obligation which must be established ____ 2. Statement 1: For a contract to be perfected, the offer must be absolute and the acceptance must be certain Statement 2: Acceptance made by letter or telegram prima facie bind the offerer from the time the offer was made a. both statements are correct c. only statement 2 is correct b. only statement 1 is correct d. both statements are not correct ____ 3. This refers to a contract whereby the offerer gives the offeree the privilege to purchase or not a certain object for a fixed price at any time within an agreed period for a fixed price. a. earnest contract c. preparatory contract b. option contract d. voidable contract ____ 4. Statement 1: Business advertisements of things for sale are definite offers, and contract is perfected upon its acceptance. Statement 2: Advertisements for bidders are invitations to make proposals, and the advertiser is bound to accept the lowest bidder provided he complies with the notice requirements a. both statements are incorrect c. only statement 1 is correct b. both statements are correct d. only statement 2 is correct ____ 5. The following persons cannot give his/her valid consent, except: a. a pianist of the Philharmonic Orchestra who was born blind. He has been a member of the orchestra for 20 years now b. a 15-year old genius students who just graduated summa cum laude for BS Accountancy at University of the Philippines c. person suffering from senile dementia d. none of the above __ 6. This refers to medical condition of mental illness of such a severe nature that a person cannot distinguish fantasy from reality, cannot conduct her/his affairs due to psychosis, or is subject to uncontrollable impulsive behavior. a. loco de amor c. Imbecility b. Insanity d. lack of common sense ____ 7. This refer to the period in which an insane person temporarily regains his sanity and is capable of perfect enjoyment of his mental faculties for the time being a. lucid interval c. intermittent sanity b. Interlude d. Intervention ____ 8. Statement 1: Contracts entered into during a lucid interval are invalid. Statement 2: Contracts agreed to in a state of drunkenness or during a hypnotic spell are void. a. both statements are incorrect c. only statement 1 is correct b. both statements are correct d. only statement 2 is correct ____ 9. Persons specially disqualified by law to enter into a contract are the following, except: a. Spendthrifts c. Hospitalized lepers b. Those persons under civil interdiction d. Those suffering from incurable disease ____ 10. A contract where consent is given through mistake, violence, intimidation, undue influence, or fraud is a. valid c. voidable b. void d. annullable ____ 11. This condition occurs when a person believes that a condition or event exists when it does not a. mistake of truth c. mistake of law b. mistake of fact d. mistaken identity ____ 12. The following conditions will vitiate the consent, except: a. If the mistake refers to the substance of the thing which is the object of the contract b. If the mistake refers to simple mistake of account which shall be corrected, such as when the error arises from mathematical computation c. If the mistake refers to those conditions which have principally move one or both parties to enter into a contract d. If the mistake refers to the identity or qualifications of one of the parties if such identity or qualification have been the principal cause of the contract ____ 13. This refers to mistake where the legal effect of an agreement of the real purpose of the parties is frustrated and the same is mutually committed by parties due to lack of understanding on the complexities of the consequences of the provisions of law. a. mistake of facts c. mistake of facts and law b. mistake of law d. mistaken identity ____ 14. This refers to defect in consent when one of the contracting parties is compelled by a reasonable and well- grounded fear of an imminent and grave evil upon his person or property, or upon the person or property of his spouse, descendants or ascendants, to give his consent. a. physical coercion c. undue influence b. mora accipiendi d. moral coercion ____ 15. The following are considered in determining whether undue influence deprive the party the reasonable freedom of choice, except: a. degree of intoxication of one of the contracting parties b. the family relations between the parties c. one of the party is in financial distress d. degree of education of one of the parties ____ 16. Refer to fraud done that without it, consent would’ve not been given. This renders the contract voidable a. ordinary fraud c. incidental fraud b. extraordinary fraud d. causal fraud ____ 17. This refers to fraud done that without it, the creditor would’ve agreed in different terms. The contract remains valid but the party offended is entitled to damages a. dolo causante c. dolo cessante b. dolo incidente d. dolo commandante ____ 18. This refers to a contract that, by mutual agreement, does not express the true intent of the parties. It does not have legal effect and does not create juridical tie between the parties. a. illegal contract c. to-good-to-be-true contract b. simulated contract d. unenforceable contract ____ 19. Which of the following may be a valid object of a contract? a. lotto ticket drawn 2 weeks ago c. chicken infested with asian-flu virus b. dilapidated residential house d. vibranium from Wakanda country ____ 20. Which of the following may not be a valid object of a contract? a. Nokia 3310 cellular phone available on online shopping sites b. Rice that has yet to be harvested next week c. Portion of Mt. Banahaw previously declared as protected area for conservation d. all of the above ____ 21. The following cannot be the object of a contract, except: a. Those that are licit or not contrary to law, morals and good customs b. Those that can be possibly accomplished c. Those that are outside the commerce of men d. Those rights that are intransmissible ____ 22. Impossible thing or service are a. Those that are contrary to law, morals, good customs, public order or public policy b. Those that are outside the commerce of men c. those future inheritance comprises of real and personal properties d. Those objects or performances that is incapable of being done, attained or fulfilled ____ 23. Refers to the immediate, direct, most proximate and essential reason or the driving force why a party enters into a contract. a. consent of the contracting parties c. the lawful cause of the contract b. object of the contract d. the price stipulated by the parties ____ 24. The cause of this kind of contract is the generosity of one of the contracting parties a. onerous contract c. gratuitous contract b. remuneratory contract d. contract of donation ____ 25. Motive is distinguished from contract such that a. The illegality of the motive does not invalidate contract b. The illegality of the motive will invalidate contract c. It is the direct and most proximate reason of a contract d. It is presumed lawful and existing in every contract ____ 26. Contracts without cause, or with unlawful cause a. are void from the beginning b. are valid until annulled c. entitles the parties to seek rescission of the contract d. allows the innocent party to recover damages from the other ____ 27. Lesion or inadequacy of cause shall invalidate a contract a. When there was fraud, mistake or undue influence b. When the selling price is below the fair market value of the property c. When both the seller and the buyer are minors d. When the amount is payable in foreign currency ____ 28. When cause is not stated in a contract, a. it is void and produces no legal effect b. lawful cause is presumed to exist c. it is considered voidable where any party may ask for annulment of the contract d. it is presumed that the cause is illegal ____ 29. Which of the following is a contract of pure beneficence? a. deed of absolute c. deed of donation b. real estate mortgage d. special power of attorney ____ 30. Which of the following contract should be in writing, otherwise, it is void a. contract of sale involving specific motor vehicle with a price of P500,000 b. authority of the agent to sell the real property of the owner c. the power to administer all the business enterprises of the owner d. lease of condominium unit at P10,000 per month ____ 31. Refers to those that are perfected by the delivery of the object of the contract such as depositum, pledge and commodatum a. formal contract c. real contract b. solemn contract d. accessory contract ____ 32. The following contracts shall appear in public instruments to be valid to bind third person, except: a. renunciation of hereditary rights b. power to administer property for another c. transmission of real rights over immovables d. obligation to deliver 10 sacks of rice ____ 33. Which is a formal contract? a. Commodatum c. real estate mortgage b. Pledge d. Marriage ____ 34. Contracts perfected by mere consent is referred to as a. consensual contracts c. formal contracts b. real contracts d. solemn contracts ____ 35. Public instruments mean that a. the instrument is computer-printed b. the instrument is notarized by a notary public c. the instrument bears the seal of the contracting parties d. the instrument is signed by the parties and their witnesses ____ 36. An instrument is referred to as private instrument where a. the instrument is computer-printed b. the instrument is notarized by a notary public c. the instrument bears the seal of the contracting parties d. the instrument is reduced in writing and signed by the parties ____ 37. It is the meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service a. Contract c. negotiorum gestio b. Obligation d. quasi-delict ____ 38. Which is not an essential element of a contract? a. Consent of the contracting parties b. Object certain which is the subject matter of the contract c. Cause of the obligation which must be established d. Warranty against hidden defects ____ 39. This refer to those found in certain contracts unless set aside or suppressed by parties such as warranty against eviction and warranty against hidden defects in a contract of sale a. essential elements of a contract c. incidental elements of a contract b. natural elements of a contract d. accidental elements of a contract ____ 40. This refers to the fulfillment or performance of the terms and conditions agreed upon in the contract may be said to have been fully accomplished or executed a. perfection of a contract c. termination of a contract b. preparation of a contract d. annulment of a contract ____ 41. The contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided they are not contrary to law, morals, good customs, public order, or public policy. This characteristics of a contract is referred to as: a. consensuality of contract c. generosity of contract b. liberality of contract d. relativity of contract ____ 42. An agreement to marry a 15-year old girl with a 30-year old bachelor is a. valid, provided that the girl, her parents and the bachelor all agreed in writing b. voidable, since one of the contracting part is a minor c. void, since the agreement is contrary to public policy protecting the minor d. valid, provided that the girl and the bachelor is deeply in love with each other ____ 43. Which of the following is a nominate contract? a. I give that you may do c. I do that you may do b. I do that you may give d. I give that you may pay ____ 44. It refers to the reciprocal understanding or agreement between parties. This is an essential ingredient in the creation of a legally enforceable contract. a. reciprocity of contract c. relativity of contract b. mutuality of contract d. consensuality of contract ____ 45. It means that stipulations in the contract are binding only upon the parties and their successors. a. Relativity of contract c. Mutuality of contract b. Consensuality of contract d. Reciprocity of contract ____ 46. The following are rights that can be transmitted by the parties to their heirs or assigns, except: a. usufructuary rights c. parental rights b. leasehold rights d. right of redemption ____ 47. It refers to the action where the creditor files an action in court for rescission of acts or contracts entered into by the debtor designed to defraud the creditor. a. Accion pauliana c. Accion publicciana b. Accion reinvigatoria d. Accion directa ____ 48. Refers to a contract or provision in a contract that confers benefit to a third party a. Stipulation del beneficio c. Stipulation credito b. Stipulation pour autrui d. Stipulation pauliana ____ 49. The following are requisites for a creditor to exercise accion pauliana, except: a. The creditor is not prejudiced by act or contract entered into by the debtor b. The creditor must have pursued all properties of the debtor subject to execution c. The debtor does an act or enter into a contract with another person to defraud the creditor d. The creditor has no other available legal remedy ____ 50. Refers to contracts that are perfected by the delivery of the object of the contract such as depositum, pledge and commodatum a. consensual contracts c. formal contracts b. real contracts d. solemn contracts ____ 51. These contracts are those where there is an exchange of valuable consideration between parties such as contract of sale and barter a. onerous contracts c. indemnity contracts b. gratuitous contracts d. remuneratory contracts ____ 52. Which is a gratuitous contract? a. contract of sale c. contract of donation b. contract of lease d. employment contract ____ 53. Which is an accessory contract? a. contract of agency c. contract of pledge b. contract of barter d. contract of loan ____ 54. It refers to contract where only one of the party drafted the contract, while the other party merely signify his consent to the prepared contract. This includes contract of insurance, contract of carriage and bank promissory notes and the like. a. auto contract c. contract of carriage b. contract of adhesion d. pre-numbered contract ____ 55. Which of the following is a real contract? a. sale of parcel of agricultural land c. lease of tourist bus b. pledge of jewelry to pawnshop d. partnership contract ____ 56. It refers to a contract where one which the fulfillment of the obligation depends upon chance such as contract of insurance a. emptio rei spei contract c. commutative contract b. aleatory contract d. conditional contract ____ 57. When there is doubt whether the intention of the party is either a deed of absolute sale or real estate mortgage, the doubt should be resolve in favor of a. deed of absolute sale c. nullity of the contract b. deed of real estate mortgage d. unenforceability of the contract ____ 58. This is used to indicate the doubt a judge must entertain before s/he can search for or apply a secondary meaning. It means vagueness or uncertainty of meaning, the possibility of interpreting an expression in two or more distinct ways. a. ambiguity c. metaphor b. undue influence d. irony ____ 59. It refers to an ambiguity that does not readily appear in the language of a document, but arises from a collateral matter when the document’s terms are applied or executed. a. intrinsic ambiguity c. casual ambiguity b. formal ambiguity d. extrinsic abiguity ____ 60. Refer to those which have caused a particular economic damage either to one of the parties or to a third person and which may be set aside even if valid a. voidable contracts c. void contracts b. rescissible contracts d. unenforceable contracts ____ 61. This refers to the remedy allowed by law to the contracting parties and to third person/s to repair the damage cause them by a contract. a. annulment c. rescission b. vitiation d. revocation ____ 62. Which of the following is not a rescissible contract? a. Those which are entered into by guardians whenever the wards whom they represent suffer lesion by more than one-half of the value of the things which are the object thereof b. Those undertaken in fraud of creditors when the latter cannot in any other manner collect the claims due them c. Those which refer to things under litigation if they have been entered into by the defendant without the knowledge and approval of the litigants or of competent judicial authority d. All other contracts specially declared by law to be subject to rescission ____ 63. Payments made in a state of insolvency are considered a. void contracts c. unenforceable contracts b. voidable contracts d. rescissible contracts ____ 64. To cancel a contract and restore the parties to their original positions before the contract, the parties should execute a a. Novation c. Rescission b. Release d. Revocation ____ 65. Which of the following statements regarding mutual restitution is not correct? a. it creates an obligation to return the things which are the objects of the contract and their fruits b. it creates an obligation to return the price with interest c. no obligation to return when the thing is already in possession of party who acquired it in good faith d. the party seeking rescission need not return whatever he obtained from the contract ____ 66. This refers to the legal process of seizing property of the debtor to ensure satisfaction of a judgment in favor of the creditor a. Garnishment c. levy b. attachment d. distraint ____ 67. The action to claim rescission must be commenced a. within 4 years from the time the rescissible contract was entered into by the guardian b. within 4 years from the time the minor reaches the age of minority c. within 4 years from the time the creditor knew of the debtor’s fraudulent contract entered into with a third person d. all of the above ____ 68. When an insolvent debtor donated several of his properties in favor of a third person, there is a prima facie presumption that a. the debtor is truly a generous person b. the donation is void for lack of capacity of the debtor to donate c. the donation is made to defraud the creditors d. the donation is voidable and the heirs of the debtor can sue for annulment of the contract ____ 69. This refers to the remedy to correct a written instrument so that it conforms to the original intent of the parties to such an instrument. a. reformation of instrument c. correction of instrument b. interpretation of instrument d. annulment of instrument ____ 70. When the parties do not agree on the stipulations contained in the contract, the proper action is a. to reform the instrument c. to enforce the instrument b. to cancel the instrument d. to seek damages to each other ____ 71. If mistake, fraud, inequitable conduct, or accident has prevented a meeting of the minds of the parties, the proper remedy is a. reformation of the instrument c. annulment of the contract b. reformatting of the instrument d. enforcement of the contract ____ 72. When a mutual mistake of the parties causes the failure of the instrument to disclose their real agreement, the remedy of the parties is a. annulment of the contract c. seek damages to guilty party b. execution of the contract d. reformation of contract ____ 73. There shall be no reformation in the following case, except: a. Wills b. Simple donations inter vivos wherein no condition is imposed c. Simple donations mortis causa wherein no condition is imposed d. When the real agreement is void ____ 74. Which of the following contract is donation inter-vivos? a. commodatum c. antichresis b. usufructuary d. simple donation ____ 75. Readers to a contract which cannot be legally enforced because of some deficiency in the agreement. It cannot be enforced unless ratified a. unenforceable contract c. defective contract b. invalid contract d. voidable contract ____ 76. Marga orally sold to Oliva her house and lot for P1,000,000, where Oliva initially paid P100,000. After paying the balance, Oliva now seeks to register the lot in her name, but the Register of Deeds refused to do so. Which of the following statement is true in this situation? a. The transaction involving the oral sale of a house and lot is null and void b. The contract between Marga and Oliva is unenforceable under the statute of frauds c. The oral sale of house and lot, although unenforceable under the statute of frauds, it has been ratified by the receipt of the consideration, and therefore, Oliva can compel Marga to execute the deed of sale in a public instrument d. If Marga does not want to execute the public instrument, she can rescind or cancel her agreement with Oliva ____ 77. Drake represented himself as agent of Holdem and sold the latter’s car to King. Holdem did not authorize anyone to sell his car to any person, and he has no intention of selling his car. The contract between Drake and King is a. Rescissible c. Unenforceable b. Voidable d. Void ____ 78. Koby verbally sold his land to Garp for P500,000. The contract entered into by parties is a. Rescissible c. Unenforceable b. Voidable d. Void ____ 79. The husband, in his capacity as the head of the family, sold a paraphernal property of his wife in the latter’s name, without her consent. The contract of sale is a. Unenforceable c. Void b. Rescissible d. Voidable ____ 80. This contract is without effect unless ratified a. Marriage between first degree cousins b. Contract of sale between two insane persons c. Contract of sale between a guardian and his ward d. Donation between husband and wife ____ 81. A defective contract because it is entered into in the name of another without or in excess of his authority a. Void c. Rescissible b. Voidable d. Unenforceable ____ 82. The following cures the defect in an unenforceable contract, except: a. Failure of defendant to object in time, to the presentation of parol (oral) evidence in court, the defect of unenforceability is cured b. Acceptance of benefits under the contract c. Estoppel sets in by accepting performance, the defect is waived d. Novation of the original contract ____ 83. Refer to those contracts that which is null and completely without legal force or binding effect between parties a. voidable contracts c. void contracts b. unlawful contracts d. illegal contracts ____ 84. Statement 1: A void contract produces no effect whatsoever either against or in favor of anyone; it does not create, modify or extinguish the juridical relation to which to refers Statement 2: The resolution of the validity or voidness of the contract remains a legal or judicial question as it requires exercise of judicial function a. Both statements are true c. Only statement 1 is true b. Both statements are false d. Only statement 2 is true ____ 85. Allan bought a parcel of land from Binoy on installment. When the first instalment fell due, Allan did not have available money, and he now pleaded impossibility of the performance. a. Allan’s obligation is extinguished because he has no available money to perform his obligation b. Allan’s obligation is extinguished because of the impossibility of performance c. Allan is liable for pecuniary liability to fulfill the obligation to pay d. Allan is liable because the obligation is to pay specific money ____ 86. The following are considered void contracts, except: a. Those which are relatively simulated or fictitious contracts b. Those whose cause or object did not exist at the time of the transaction c. Those whose object is outside the commerce of men d. Those which contemplate an impossible service ____ 87. Oral sale of prohibited drugs and paraphernalia worth P100,000 is a. unenforceable contract c. impossible contract b. unlawful contract d. contract beyond the commerce of men ____ 88. The following are the characteristics of a void contract, except: a. The right to set up illegality cannot be waived. b. It cannot be ratified c. Mutual restitution is allowed d. The action or defense for the declaration of the inexistence of a contract does not prescribe. ____ 89. This refers to a contract that is valid and binding unless avoided or declared void by a party to the contract who is legitimately exercising a power to avoid the contractual obligations a. voidable contract c. formal contract b. void contract d. unlawful contract ____ 90. The following are voidable contracts, except: a. when one of the contracting parties is incapable of giving consent to a contract b. when both of the contracting parties is incapable of giving consent to a contract c. when consent is vitiated by violence d. those entered into during state of drunkenness ____ 91. The following are factors vitiating consent, except: a. Mistake c. Intimidation b. Dolo incidente d. Violence ____ 92. Statement 1: all obligations are contract Statement 2: an action to annul a voidable contract generally prescribes in four months a. Both statements are correct c. Only statement 1 is correct b. Both statements are not correct d. Only statement 2 is correct ____ 93. The following are the requisites for mistake to vitiate consent, except: a. The error must be substantial regarding the object of the contract or the condition which principally moved one or both parties to enter into a contract b. The error must be excusable and not cause by negligence c. The error must be of fact d. The mistake must be of law ____ 94. Teach entered into a contract with Shiliew by threatening Shiliew that if he does not agree to make the contract, Teach will publish defamatory matter concerning Shiliew’s wife a. The contract is valid because the defamatory matter to be published does not relate to Shiliew, the contracting party b. The contract is voidable because such publication when carried out whether rue or not, will cause serious harm to Shiliew and his wife c. The contract is unenforceable but Shiliew is entitled to damages the moment the publication is made d. The contract is void ____ 95. Trafalgar sold to Basil his land with a market value of P3,000,000 for only P2,000,000. The sale with inadequate price is a. Rescissible c. Unenforceable b. Voidable d. Valid ____ 96. The contract entered into by the persons who cannot give consent is a. Void ab initio, because actually there is no contract to speak of b. Rescissible because of the damage caused to the incapacitated persons c. Unenforceable only because the contract may be ratified d. Voidable as there is consent although it is vitiated or defective ____ 97. This refers to any improper or wrongful constraint, machination, or urgency of persuasion, by which one's will is overcome and he is induced to do or forbear an act which he would not do, or would do, if left to act freely. a. misrepresentation c. intimidation b. undue influence d. persuasiveness ____ 98. The action for annulment of a voidable contract shall be a. within 4 years from the time the minor reaches the age of 21 b. within 4 years from the time of the discovery of mistake or fraud c. within 4 years from the death of the party who employed violence in obtaining the consent of another d. within 4 years from the date of the execution of the voidable contract ____ 99. Which of the following statement is true? a. Ratification is the act of confirmation or validation of the prior act. b. Ratification may be express or implied c. Ratification may be oral or in writing d. Ratification cleanses the defect in the contract, and its effect retroacts from the day the ratification was made ____ 100. Who may not ratify a voidable contract? a. The party who employs violence, intimidation, undue influence or fraud to obtain consent b. The guardian of the incapacitated person during the latter’s incapacity c. The incapacitated person after he has attained capacity d. The party whose consent is vitiated by mistake, violence, intimidation, undue influence or fraud contracts 32. ANS: D 68. ANS: C Answer Section 33. ANS: C 69. ANS: A 34. ANS: A 70. ANS: B MULTIPLE CHOICE 35. ANS: B 71. ANS: C 36. ANS: D 72. ANS: D 1. ANS: C 37. ANS: A 73. ANS: C 2. ANS: D 38. ANS: D 74. ANS: D 3. ANS: B 39. ANS: B 75. ANS: A 4. ANS: A 40. ANS: C 76. ANS: C 5. ANS: B 41. ANS: B 77. ANS: C 6. ANS: B 42. ANS: C 78. ANS: C 7. ANS: A 43. ANS: D 79. ANS: A 8. ANS: A 44. ANS: B 80. ANS: B 9. ANS: D 45. ANS: A 81. ANS: D 10. ANS: C 46. ANS: C 82. ANS: D 11. ANS: B 47. ANS: A 83. ANS: C 12. ANS: B 48. ANS: B 84. ANS: A 13. ANS: B 49. ANS: A 85. ANS: C 14. ANS: D 50. ANS: B 86. ANS: A 15. ANS: A 51. ANS: A 87. ANS: B 16. ANS: D 52. ANS: C 88. ANS: C 17. ANS: B 53. ANS: C 89. ANS: A 18. ANS: B 54. ANS: B 90. ANS: B 19. ANS: B 55. ANS: B 91. ANS: B 20. ANS: C 56. ANS: B 92. ANS: B 21. ANS: B 57. ANS: B 93. ANS: D 22. ANS: D 58. ANS: A 94. ANS: B 23. ANS: C 59. ANS: D 95. ANS: D 24. ANS: C 60. ANS: B 96. ANS: D 25. ANS: A 61. ANS: C 97. ANS: B 26. ANS: A 62. ANS: A 98. ANS: B 27. ANS: A 63. ANS: D 99. ANS: D 28. ANS: B 64. ANS: C 100. ANS: A 29. ANS: C 65. ANS: D 30. ANS: B 66. ANS: B 31. ANS: C 67. ANS: B