Business Ethics and Law
Midterm Exam
Course Introduction
Business Ethics and Law explores the complex relationship between ethical principles and legal regulations in the business environment. The course examines the foundations of ethical decision-making, the responsibilities of businesses to various stakeholders, and the legal frameworks that govern corporate conduct. Topics include corporate social responsibility, ethical leadership, conflict of interest, compliance, employment law, consumer protection, and intellectual property. Through real-world case studies and interactive discussion, students develop the critical thinking skills needed to identify, analyze, and resolve ethical and legal dilemmas faced by contemporary organizations.
Recommended Textbook Essentials of the Legal Environment Today 5th Edition by Roger LeRoy Miller
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20 Chapters
1440 Verified Questions
1440 Flashcards
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Page 2
Chapter 1: Business and Its Legal Environment
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72 Verified Questions
72 Flashcards
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Sample Questions
Q1) Maggie and Nate enter into a contract for the sale of a car,but Nate later refuses to deliver the car.Maggie asks a court to order Nate to perform as promised.Ordering a party to perform what was promised is
A)specific performance.
B)damages.
C)rescission.
D)beyond the court's authority.
Answer: A
Q2) There are legal questions involved when considering ways to raise capital so a business can grow.
A)True
B)False
Answer: True
Q3) Common law is a term for the laws that are familiar to most of us.
A)True
B)False
Answer: False
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Chapter 2: Courts and Alternative Dispute Resolution
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Sample Questions
Q1) Negotiation is the most complex form of alternative dispute resolution.
A)True
B)False
Answer: False
Q2) Transnational Corporation and United Shipping,Inc.,agree to a contract that includes an arbitration clause.If a dispute arises,a court having ju-ris-dic-tion may
A)monitor any arbitration until it concludes.
B)order an arbitrator to rule in a particular way.
C)order a party to bring the dispute to court.
D)order a party to submit to arbitration.
Answer: D
Q3) Small claims courts hear both civil and criminal cases.
A)True
B)False
Answer: False
Q4) The United States Supreme Court has original jurisdiction in some situations.
A)True
B)False Answer: True
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Chapter 3: Business Ethics
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Sample Questions
Q1) Ryan,the owner of SuperMart Stores,Inc.,adheres to the "principle of rights" theory.Under this theory,a key factor in determining whether a business decision is ethical is how that decision affects
A)the right determination under a cost-benefit analysis.
B)the rights of others.
C)the "right" thing to do.
D)the right to make a profit.
Answer: B
Q2) According to utilitarianism,an action that affects the majority adversely is morally wrong.
A)True
B)False
Answer: True
Q3) In making decisions for Smartt Investments,Rita uses a cost-benefit analysis.This is a part of
A)duty-based ethics.
B)Kantian ethics.
C)rights-based ethics.
D)utilitarian ethics.
Answer: D
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Chapter 4: Business and the Constitution
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Sample Questions
Q1) A law that limits only some persons' exercise of a fundamental right is valid under any circumstances.
A)True
B)False
Q2) The President determines the jurisdiction of the federal courts.
A)True
B)False
Q3) The President appoints federal judges with the advice and consent of the Senate.
A)True
B)False
Q4) A restriction on commercial speech is valid as long as it forbids only the expression of views on controversial issues.
A)True
B)False
Q5) A law that restricts people of a certain national origin from doing something will be carefully examined to make sure it promotes a compelling government interest before it is allowed to stand.
A)True
B)False
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Chapter 5: Powers and Functions of Administrative Agencies
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Sample Questions
Q1) There is a precise definition of what makes an administrative rule arbitrary and capricious.
A)True
B)False
Q2) Guard Personnel Company (GPC)is charged with using hiring practices that do not meet requirements set by the Transportation Safety Administration (TSA).The administrative law judge orders GPC to comply with the TSA's regulations.GPC may
A)appeal to the commission that governs the TSA.
B)appeal to Congress,which created the TSA.
C)appeal to a different,separate agency.
D)ignore the order.
Q3) Often,an administrative agency itself enforces its rules.
A)True
B)False
Q4) Administrative agencies-like the Securities and Exchange Commission,the Federal Trade Commission,and the Food and Drug Administration-make rules.What are the two basic types of rules called,and how binding are they? What must an administrative rule NOT do?
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Chapter 6: Tort Law
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Sample Questions
Q1) The bases of all torts are wrongs and compensation.
A)True
B)False
Q2) Lizzie,a clerk at a Devices Plus retail store,takes an iPad from the store without permission.Lizzie is liable for A)appropriation.
B)benefiting an employee.
C)conversion.
D)wrongful interference with a business relationship.
Q3) If it can be shown that a trespass to land was warranted,a complete defense exists.
A)True
B)False
Q4) Under the theory of negligence,the duty of care requires a careless act. A)True
B)False
Q5) The most widely used defense in negligence actions is comparative negligence. A)True
B)False
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Chapter 7: Criminal Law and Cyber Crime
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Sample Questions
Q1) A criminal case must be proved beyond a reasonable doubt.
A)True
B)False
Q2) Jake is charged with embezzlement.Embezzlement may be committed without A)a criminal act.
B) a criminal intent.
C)taking property from its owner.
D)the use of force or fear.
Q3) Individuals who are arrested must be informed of certain constitutional rights.
A)True
B)False
Q4) Public officials prosecute criminal defendants.
A)True
B)False
Q5) Felonies are punishable by imprisonment for more than a year or death.
A)True
B)False
Q6) Picking pockets is larceny.
A)True
B)False
Page 9
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Chapter 8: Intellectual Property Rights
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Sample Questions
Q1) From Southeast Asia,Tai Ltd.exports genuine trademarked goods to the United States.Tai also makes labels and packaging bearing another firm's trademark,ships the labels to another location,and then affixes them to an inferior product to deceive buyers.Tai sells these goods to retailers who are unaware that the marks are counterfeit.Under the Stop Counterfeiting in Manufactured Goods Act,it is a crime to A)import genuine trademarked goods.
B)traffic in counterfeit labels,stickers,and packaging.
C)sell counterfeit versions of brand-name products in foreign countries.
D)unknowingly use a counterfeit mark on goods.
Q2) RiteMade Machinery,Inc.,designs,makes,and sells a unique drill press.Steel Equipment Company copies the design without RiteMade's permission.Steel's conduct is actionable provided that
A)consumers are confused.
B)Steel's conduct is intentional.
C)Steel's conduct reduces the value of RiteMade's design.
D)RiteMade's design is patented.
Q3) A trademark can be diluted by the use of a similar mark.
A)True
B)False
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Page 10
Chapter 9: Internet Law, social Media, and Privacy
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Sample Questions
Q1) Sales & Revenue,Inc.,discovers that defamatory statements about its policies and products are being posted in an online forum.TransWeb Inc.,the Internet service provider whose users are posting the messages,refuses to disclose the identity of the person or persons responsible.Sales & Revenue files a suit against the anonymous users.The plaintiff can obtain from TransWeb the identity of the persons responsible for the defamatory messages by
A)using the authority of the court.
B)gaining unauthorized access to TransWeb's servers.
C)deceiving TransWeb into revealing the posters' identities.
D)no legal or illegal means.
Q2) A company can distribute file-sharing software with the object of promoting its use to infringe copyrights without liability for the resulting acts of infringement by its users.
A)True
B)False
Q3) Downloading music into a computer's random access memory,or RAM,is not copyright infringement,even if it is done without authorization.
A)True
B)False
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11
Chapter 10: International Law in a Global Economy
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Sample Questions
Q1) Tariffs are imposed only on exports.
A)True
B)False
Q2) Senator Brown and other politicians want to restrict the flow of technologically advanced products and data from the United States to other countries.To restrict or encourage exports,Congress can
A)do nothing.
B)assess antidumping duties.
C)impose export taxes.
D)set export quotas.
Q3) Wrugged Woolens,Inc.,a U.S.corporation,sets up a specialized marketing organization in Scotland by appointing a foreign agent.This is called
A)direct exporting.
B)indirect exporting.
C)a joint venture.
D)piracy.
Q4) A tariff is always a flat rate per unit.
A)True
B)False
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Chapter 11: Business Organizations
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Sample Questions
Q1) Owen plans to open Owen's Pets Store,a pet sales and pet supplies outlet,and to hire Quimby and Ruth.Owen will invest only his own money.He does not expect to make any profit for at least two years and to make almost no profit for the first three years,but he hopes to expand eventually.Which form of business organization would be most appropriate? What are the chief characteristics,advantages,and disadvantages of this form of business organization? If Owen wants to obtain additional capital to expand the business,but does not want to lose control of the firm,what is his best option?
Q2) Skyla and Terry want to form and do business as Unbound Games Corporation.Most statutes governing the formation and use of corporations are guided by A)city or county corporate codes.
B)the Entrepreneur's Corporate Handbook.
C)the federal Administrative Procedure Act.
D)the Revised Model Business Corporation Act.
Q3) Shareholders' meetings need not occur at any certain interval.
A)True
B)False
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Page 13
Chapter 12: The Formation of Traditional and E-Contracts
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Sample Questions
Q1) A bilateral contract comes into existence at the moment promises are exchanged.
A)True
B)False
Q2) A counteroffer is a rejection of the original offer and the simultaneous making of a new offer.
A)True
B)False
Q3) Under federal law,an electronic signature is as valid as a signature on paper.
A)True
B)False
Q4) No offer may be revoked before it is accepted.
A)True
B)False
Q5) A contract entered into by a minor is voidable at the option of either of the contracting parties.
A)True
B)False
Q6) The element of bargained-for exchange distinguishes contracts from gifts.
A)True
B)False
Page 14
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Chapter 13: Contract Performance, breach, and Remedies
Voluntary Consent
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Sample Questions
Q1) Specific performance will not be granted unless the party's legal remedy is inadequate.
A)True
B)False
Q2) Anticipatory repudiation discharges a contract.
A)True
B)False
Q3) Nora enters into a contract with Oceanic Transport,Inc.,to insure and ship a painting from France to the United States for a certain price.But Oceanic makes a mistake in adding the costs,which results in a contract price that is $1,000 less than the true cost.Most likely,a court would
A)allow the parties to rescind the contract.
B)award damages to Nora for the mistake.
C)award damages to Oceanic for the mistake.
D)enforce the contract as is.
Q4) A contract may not be enforceable if one party is aware that the other party made a mistake of fact.
A)True
B)False
Page 15
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Chapter 14: Sales, leases, and Product Liability
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Sample Questions
Q1) A warranty of good title means that a seller warrants that he or she has valid title to the goods and that transfer of the title is rightful.
A)True
B)False
Q2) Fruit of the Plant,Inc.,agrees to sell a certain quantity of a high-quality grain seed to Grange Co-op.Fruit of the Plant can obtain only half of the quantity ordered,so the seller also ships a lesser quality seed in twice the amount of the remainder of the order for the same price.Grange Co-op rejects the lesser quality seed.With time for performance not yet expired,Fruit of the Plant can
A)attempt to cure the defect.
B)cancel the contract.
C)recover the purchase price plus incidental damages.
D)resell or dispose of the goods and hold Grange Co-op liable for any loss.
Q3) If the subject matter of a contract dispute is services,the common law applies.
A)True
B)False
Q4) Real estate is included within the scope of UCC Article 2.
A)True
B)False
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Chapter 15: Creditors Rights and Bankruptcy
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Sample Questions
Q1) A court awards a judgment to Loan Collection Agency,who is the creditor,against Margret,who is the debtor.After the judgment,the creditor requests a court order to seize Margret's property to ensure that the judgment will be collectible.This is
A)a judicial lien.
B)a writ of attachment.
C)a writ of execution.
D)a violation of most state laws.
Q2) Only a few types of property-a debtor's wages or bank account,for example-can be garnished.
A)True
B)False
Q3) Refer to Fact Pattern 15-1.Regarding the pick-up truck,Damian
A)can exempt an interest in it up to $3,675 from the bankruptcy.
B)must include it as part of the estate because Damian sold the cycle.
C)must include it as part of the estate because Eden's check did not cover the cost of the cycle.
D)must include it as part of the estate unless the trustee recovers the price from Eden.
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Page 17
Chapter 16: Employment, immigration, and Labor Law
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Sample Questions
Q1) Remedies of the agent for breach of duty by the principal arise out of contract and tort law.
A)True B)False
Q2) Both employers and employees contribute to help pay for benefits that will partially make up for the employees' loss of income on retirement.
A)True B)False
Q3) Rita is appointed as an agent for Superior Sales,Inc.The agency agree-ment is silent as to the level of sales that Rita is expected to achieve.She must A)achieve nothing because the agreement says nothing on the issue.
B)attain the level that Rita achieved with her previous employer.
C)maintain the level Superior attained before Rita became an agent.maintain the level Superior attained before Rita became an agent.
D)use reasonable diligence and skill in selling.
Q4) Only the federal government sets safety standards governing workplaces.
A)True B)False
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18
Chapter 17: Employment Discrimination
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Sample Questions
Q1) Lew,a member of a protected class,applies for a job with Mit-E Construction Company,but fails Mit-E's employment test and is not hired.Lew believes that the test has an unintentionally discriminatory effect.If so,this is
A)reverse discrimination.
B)disparate-impact discrimination.
C)disparate-treatment discrimination.
D)not discrimination.
Q2) Resourced Forestry Corporation and the Service Employees International Union are sued by plaintiffs alleging job discrimination in violation of Title VII of the Civil Rights Act of 1964.This law applies to employers and labor unions with at least A)fifteen employees or members.
B)five employees or members.
C)ten employees or members.
D)one employee or member.
Q3) Employee demotion will support a finding of constructive discharge,particularly when the employee was subjected to humiliation.
A)True
B)False
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19
Chapter 18: Environmental Law
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Sample Questions
Q1) BioChemical Disposal Corporation operates a hazardous waste storage facility.ChemCo Inc.buys BioChemical before it is discovered that the firm's disposal practices violated CERCLA.With respect to these violations,Superfund imposes on ChemCo
A)strict liability.
B)liability under the nuisance doctrine.
C)liability on a negligence theory.
D)no liability.
Q2) Persons who provide information about violators of the Clean Air Act may be paid up to $10,000.
A)True
B)False
Q3) New sources of water pollutants must install pollution-control equip-ment before beginning operations.
A)True
B)False
Q4) The Safe Drinking Water Act requires the EPA to set maximum levels for pollutants in public water systems.
A)True
B)False
Page 20
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Chapter 19: Antitrust Law and Promoting Competition
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Sample Questions
Q1) Pads & Pods Corporation requires all distribu-tors of its products to sell the products at specified minimum prices.This resale price mainte-nance agreement is
A)a per se violation of antitrust law.
B)a legal restraint of trade.
C)subject to evaluation under the rule of reason. D)not subject to antitrust law.
Q2) A price-fixing agreement is an agreement among competitors to fix prices.
A)True
B)False
Q3) Monopoly involves the power to affect prices.
A)True
B)False
Q4) Conditioning the sale of one product on the purchase of another is an tying arrangement.
A)True
B)False
Q5) Labor unions can organize and bargain without violating antitrust law. A)True B)False
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Chapter 20: Investor Protection and Corporate Governance
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Sample Questions
Q1) Adrian,the chief executive officer of Beds n' Sofas,Inc.,inten-tionally understates the amount of Beds n' Sofas'sdebts in information provided to investors as part of an issue of Beds n' Sofasstock.Cassie buys the stock and suffers a loss. Adrian may be subject to A)government prosecution and Cassie's suit.
B)negative publicity but no criminal prosecution or civil suit.
C)only government prosecution.
D)only Cassie's suit.
Q2) Heavy Hauling,Inc.,is a public company whose shares are traded in the public securities markets.Under the Sarbanes-Oxley Act of 2002,to ensure that Heavy Hauling's financial results are accurate and timely,the firm's senior officers must set up and maintain
A)internal "disclosure controls and procedures."
B)external "release and reveal timetables."
C)personal "peruse and review liability policies."
D)public "information and discussion forums."
Q3) SEC Rule 10b-5 applies to almost all cases involving the trading of securities. A)True
B)False
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