Business Ethics and Law Review Questions
Course Introduction
Business Ethics and Law explores the fundamental principles guiding ethical decision-making and legal responsibilities in the business environment. The course examines the interplay between moral values and legal regulations, addressing topics such as corporate social responsibility, ethical leadership, compliance, stakeholder management, and global standards. By analyzing real-world cases and legal frameworks, students gain practical skills for identifying ethical dilemmas, understanding regulatory requirements, and developing responsible business strategies that foster trust and long-term success.
Recommended Textbook
The Legal Environment of Business 13th Edition by Roger E. Meiners
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22 Chapters
9532 Verified Questions
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Page 2
Chapter 1: Todays Business Environment: Law and Ethics
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327 Verified Questions
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Sample Questions
Q1) Under a civil law system, judges can:
A) only rule on matters lawyers bring them
B) initiate proceedings on their own
C) only rule on cases involving businesses
D) only rule on tort cases
E) none of the other choices
Answer: B
Q2) The separation of powers is:
A) generally called the law of the land
B) the division of powers within state legislatures
C) the division of the power of the president and the power of the vice president
D) the division of executive privileges
E) none of the other choices are correct
Answer: E
Q3) Plaintiffs in civil law suits must demonstrate their case to the judge or jury beyond a reasonable doubt.
A)True
B)False
Answer: False
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Page 3
Chapter 2: The Court Systems
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Sample Questions
Q1) In BancorpSouth Bank v. Hazelwood Logistics Center, where the bank sued Hazelwood and its owners for payment, the defendants claimed the federal district court did not have jurisdiction because of a lack of diversity of citizenship. The appeals court held that:
A) the district court was correct in not dismissing the suit because state law allows parties to agree to a "permissive" forum selection clause.
B) the district court was incorrect in dismissing the claim because state law did not allow verbal adjustment of contracts
C) the district court was correct in dismissing the claim because state law did not allow verbal adjustment of contracts
D) none of the other choices are correct
Answer: A
Q2) The Federal Rules of Civil Procedure are used in many state court systems to set procedure in state courts.
A)True
B)False
Answer: True
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4
Chapter 3: Trials and Resolving Disputes
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Sample Questions
Q1) The judge's temperament, the complexity of the evidence, and the degree to which the emotions of the jury are likely to affect the judgment are all factors that affect:
A) the decision to request a jury trial
B) the decision to go to trial
C) the choice of attorney
D) the length of the trial
E) the tone of the trial
Answer: A
Q2) In Georgia State Licensing Board for Residential and General Contractors v. Allen the Georgia Supreme Court held that an injunction would be issues against the Board against its licensing process as contractors had not be properly informed of new requirements.
A)True
B)False
Answer: False
Q3) To ensure fairness in trials, most courts freely allow new trials.
A)True
B)False
Answer: False
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Page 5
Chapter 4: The Constitution: Focus on Application to Business
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Sample Questions
Q1) Which of the following state taxes is unconstitutional:
A) Hawaii imposed a 20 percent tax on all alcoholic beverages except for local products
B) Michigan exempted from state income taxes the retirement benefits paid to state employees, but taxed all other retirement income, such as retired federal government employees' benefits
C) North Dakota imposed state sales taxes on out-of-state firms doing mail-order business with North Dakota residents
D) all of the other specific choices are unconstitutional
E) none of the other specific choices are unconstitutional
Q2) In McCulloch v. Maryland the Supreme Court upheld the constitutionality of a bank chartered by Congress.
A)True
B)False
Q3) The states do not have the power to limit federal taxes on property owned by citizens in their own states.
A)True
B)False
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Page 6
Chapter 5: Criminal Law and Business
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Sample Questions
Q1) Criminal law is:
A) primarily made up of laws adapted from civil law
B) primarily from ancient Greek law
C) primarily from British law
D) primarily made up of statutes derived from International law
E) none of the other choices are correct
Q2) It is estimated that the insanity defense in criminal cases works in about 100,000 criminal charges per year.
A)True
B)False
Q3) Intoxication and insanity are possible defenses to criminal charges
A)True
B)False
Q4) If the chain of custody is broken when gathering evidence for a criminal case:
A) the evidence is excluded
B) the evidence is kept under special consideration
C) the evidence is more powerful
D) the evidence is less useful to the prosecution
E) the evidence is less useful to the defendant
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Chapter 6: Elements of Torts
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Sample Questions
Q1) You are shopping in a department store. A store manager asks you to step into his office. He closes the door and tells you he thinks you have hidden merchandise in your clothing. You say nonsense. He says you will sit there until you confess or allow yourself to be searched. You refuse. He says, "We will see about that!" The two of you sit there for an hour. Finally, he tells you to leave. This is probably:
A) a tort of false imprisonment
B) not false imprisonment because you could have walked out
C) not false imprisonment because no physical force was used
D) not false imprisonment but may well be battery
E) not false imprisonment because state laws allow store owners to detain shoplifters
Q2) Which of the following is not an category of intentional tort:
A) assault
B) false imprisonment
C) battery
D) invasion of privacy
E) all of the other choices are in that category
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Chapter 7: Business Torts and Product Liability
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Sample Questions
Q1) Strict liability for ultrahazardous activities is an old concept going back more than a century.
A)True
B)False
Q2) A Pennsylvania court imposed strict liability on a gun manufacturer because of hearing losses caused by long-term users exposed to gunfire. The liability was based on:
A) latent defect
B) express warranty
C) defective design
D) implied warranty
E) none of the other choices
Q3) Compensation for injured parties accounts for ____ of the total cost of the tort system.
A) about two-thirds
B) less than half
C) more than half
D) about three-fourths
E) over eighty percent
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Chapter 8: Real and Personal Property
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Sample Questions
Q1) The formal right of ownership of property is:
A) the deed
B) the title
C) the documentation
D) the mortgage
E) none of the other choices are correct
Q2) In Smith v. Kulig, Smith was killed when visiting his friend who rented an apartment from Kulig, when the fire escape at the back of the building collapsed under Smith, the courts held that:
A) Smith was a trespasser on the premises and Kulig had no duty to protect him
B) Smith was not a trespasser on the premises, but Kulig still had no duty to protect him
C) Smith was a trespasser on the premises, but Kulig still had a duty to protect him
D) Since Smith was illiterate, the no trespassing signs were ineffective and Kulig was liable
E) none of the other choices are correct
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Chapter 9: Intellectual Property
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Sample Questions
Q1) In Audi AG v. D'Amato the appeals court held that Audi could stop D'Amato's use of the domain name audisport.com.
A)True
B)False
Q2) Violations of the Economic Espionage Act, such as a theft of a trade secret, can result in prison sentences.
A)True
B)False
Q3) The ____ is responsible for issuing patents.
A) Commissioner of Patents and Trademarks
B) Protector of Property
C) Commissioner of Intellectual Property
D) Secretary of State
E) Supreme Court
Q4) Anything not already registered may be used as a trademark, including a list of words that describe the product or its uses.
A)True
B)False
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Page 11
Chapter 10: Contracts
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Sample Questions
Q1) The idea that breach of contract generally only allows recovery for profits and costs incurred due to the breach is called:
A) the compensatory rule
B) the efficient breach rule
C) the remedy doctrine
D) contract damages doctrine
E) none of the other choices
Q2) Smith, who lives in your apartment building, drives you crazy. You agree to give Ratzo $5,000 if he gets rid of Smith for you. After disposing of her, Ratzo returns for his money. You refuse to pay. Ratzo sues you; the court holds the contract is:
A) enforceable and completed; you must pay what is owed
B) enforceable, but $5,000 is an unconscionable price, so it revises the contract
C) unenforceable because it involves a public servant
D) unenforceable because it involves an illegal agreement
E) enforceable because evidence proved Ms. Smith was driving everyone crazy
Q3) A legal detriment may be good consideration for a contract.
A)True
B)False
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Chapter 11: Domestic and International Sales
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Sample Questions
Q1) The UCC modifies the common law perfect tender rule by:
A) allowing the seller to deliver only half the agreed upon shipment
B) not allowing the buyer to sue the seller
C) not allowing the buyer to accept less than the entire shipment
D) allowing the buyer to accept less than the entire shipment
E) allowing the buyer to sue the seller
Q2) Article 2A of the UCC, recently adopted by most states, expands the UCC to cover:
A) sale of investment securities
B) sale of service contracts
C) sale of real estate
D) leases of personal property
E) none of the other choices
Q3) When the seller has delivered conforming goods, the buyer has a duty to accept them. This is referred to as:
A) buyer's duty of inspection
B) buyer's duty of rejection
C) buyer's duty of compliance
D) buyer's duty of contract
E) none of the other choices are correct
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Page 13
Chapter 12: Business Organizations
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Sample Questions
Q1) Directors of a corporation may be removed from office for cause, such as a breach of duty.
A)True
B)False
Q2) The name and address of a corporation, the name and address of the corporation's registered agent, and the purpose of the business are all examples of things that are generally included in:
A) the articles of profit
B) the articles of sale
C) the articles of business
D) the articles of legitimacy
E) none of the other choices are correct
Q3) A shareholder's relation to creditors of the corporation is generally that the shareholder:
A) is a secured creditor
B) is an unsecured creditor
C) holds a possessory lien
D) is a third-party beneficiary to creditors
E) none of the other choices
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Page 14
Chapter 13: Negotiable Instruments, Credit, and Bankruptcy
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Sample Questions
Q1) Which of the following are necessary for a security interest to attach:
A) the security agreement must be signed by the customer
B) the seller must have provided value
C) the customer must have legal, transferable rights in the collateral
D) all of the other specific choices are correct
E) none of the other specific choices are correct
Q2) In Summers Group v. Tempe Mechanical, Summers (Rexel) sold electrical materials used in a construction project that went into bankruptcy. Litigation developed over where various claimants stood to collect. The appeals court held that:
A) Summers had to pay all attorney fees related to the litigation as it filed its lien last
B) Summers was the only lien holder to file properly, so stood first in line to collect
C) Summers, as a materials supplier, stood in line to collect behind the electrical firm that actually performed the electrical work
D) Summers was the last lien holder to file, so stood last in line of the lien holders, but stood in line to collect before unsecured creditors
E) None of the other answers are correct
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Chapter 14: Agency and the Employment Relationship
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Sample Questions
Q1) If an agent is discovered to be representing conflicting interests, she has violated her duty of loyalty.
A)True
B)False
Q2) Refer to Fact Pattern 14-1. Meg was negligent in allowing her dog to run wild at the Emporium, but Emile had never objected to the dog being around. If Meg's negligence is the cause of Phil's harms, then:
A) Meg is personally liable for compensating Phil; Emile could not be held liable
B) Phil may not collect from Meg or Emile because he assumed the risk of working for Emile
C) Emile is liable for compensating Phil under the doctrine of respondeat superior
D) Meg is personally liable for compensating Phil under the doctrine of vicarious liability
E) Emile is not liable for compensating Phil under the doctrine of non-indemnification
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Chapter 15: Employment and Labor Regulations
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Sample Questions
Q1) Workers' compensation was created by the federal government to deal with problems of injured workers during the 1933 coal strikes.
A)True
B)False
Q2) Pay rate, insurance plans, holidays and overtime pay are all:
A) subject to mandatory bargaining
B) not subject to mandatory bargaining
C) subjects that may not be used in any type of bargaining between unions and employers
D) regulated by the Supreme Court
E) regulated by the NLRB
Q3) During a union election, which of the following may employers say?
A) that all employees will be fired if they unionize
B) that employees who join the union will be fired
C) that they will close a plant if a union is voted in
D) b and c are permissible
E) none of the other choices are legal
Q4) Employers may use the E-Verify program to check employee eligibility status.
A)True
B)False
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Chapter 16: Employment Discrimination
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Sample Questions
Q1) A woman has a difficult time with her pregnancy. She uses up all her leave time and sick time. She then often comes to work late or leave early due to feeling badly. Under the Pregnancy Discrimination Act, her employer must give her additional time off:
A) with pay, only if a physician recommends that
B) with pay, if she provides medical evidence that it is necessary
C) with pay, by extending her sick time and leave time, as required by law
D) with pay, if she requests it, so long as she is pregnant
E) none of the other choices
Q2) Reverse discrimination is:
A) preferential treatment of whites
B) preferential treatment of men
C) preferential treatment of a protected class
D) discrimination against African-Americans
E) none of the other choices
Q3) Firing an employee because she has the AIDS virus is not likely to violate the Disabilities Act because employers have a business necessity for not wanting to employ such people: i.e. high medical insurance costs.
A)True
B)False
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Page 18
Chapter 17: The Regulatory Process
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Sample Questions
Q1) Refer to Fact Pattern 15-1. If a court were to review actions of the FAH in promulgating the June, 2009 rule, what scope of review would a court use?
A) a low level of scrutiny because only technical issues are involved
B) strict scrutiny because procedural issues are involved
C) mid-level scrutiny required of all new agency regulations
D) arbitrary scrutiny as Congress required in the statute
E) de jure scrutiny required of all new agency regulations
Q2) Rules that identify an agency's structure, method of operation, or detail its internal practices are called substantive or legislative rules.
A)True
B)False
Q3) After a regulation is finalized in the Federal Register it is no longer subject to review. A)True
B)False
Q4) Administrative law judges issue written opinions after hearings on administrative complaints.
A)True
B)False
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Chapter 18: Securities Regulation
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Sample Questions
Q1) Firms that generally do not deal directly with the public and instead handle transactions for brokers are known as:
A) specialist firms
B) private firms
C) broker firms
D) unregulated firms
E) specialty firms
Q2) You are on the subway in New York when you overhear two people you do not know talking about an upcoming merger, news not yet public. They seem to know their stuff. If you buy stock based on this information, and profit when the information turns out true, you have:
A) profited, but are an outsider and so your actions are probably not illegal
B) engaged in insider trading that is probably illegal
C) not engaged in insider trading because you are not a corporate officer
D) not engaged in insider trading because once you overheard the information it was public
E) violated the Insider Trading Sanctions Act and could face criminal charges
Q3) Stockholders have a claim on future profits of a company.
A)True
B)False
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Chapter 19: Consumer Protection
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Sample Questions
Q1) In Heintz v. Jenkins, the Supreme Court held that some attorneys may be subject to the rules of the Fair Debt Collection Practices Act.
A)True
B)False
Q2) Under the Fair and Accurate Credit Transaction Act, credit reporting services must:
A) ensure that credit reports are provided to creditors upon request
B) allow consumers to see their credit reports upon request for free
C) allow consumers to see their credit reports for $10
D) notify consumers any time their credit reports have been accessed by an outside party
E) none of the other choices
Q3) Private parties may initiate civil actions for false advertising claims under:
A) the Moss-Magnuson Act
B) the Cooper-Dewitt Act
C) the Truth-in-Advertising Act
D) Article 2 of the Constitution
E) none of the other choices
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Chapter 20: Antitrust Law
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Sample Questions
Q1) A firm's market share refers to:
A) the number of products a firm produces
B) the number of states a firm operates in
C) the ability of the firm to profitably to maintain prices above competitive levels for a significant period of time
D) the percentage of sales that a firm exports
E) none of the other choices are correct
Q2) A seller is said to engage in price discrimination when the same product is sold to different buyers at different prices.
A)True
B)False
Q3) ____ is an agreement between a manufacturer, a supplier, and retailers of a product under which the retailers agree to sell the product at not less than a minimum price.
A) Minimum resale price agreement
B) Resale price fixing
C) Resale price enhancement
D) Price fixing
E) none of the other choices are correct
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Page 22
Chapter 21: Environmental Law
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Sample Questions
Q1) New plants may be built in Prevention of Significant Deterioration (PSD) areas if the:
A) government has a national defense need for the plant
B) plant installs Lowest Achievable Emission Rate (LAER) technology
C) plant owner shows that it will not cause the area's maximum allowable increase to be exceeded
D) plant installs Lowest Achievable Emission Rate (LAER) technology and the plant owner shows that it will not cause the area's maximum allowable increase to be exceeded
E) government has a national defense need for the plant and the plant installs Lowest Achievable Emission Rate (LAER) technology and the plant owner shows that it will not cause the area's maximum allowable increase to be exceeded
Q2) The principal difference between a public and private nuisance is often the number of people affected.
A)True
B)False
Q3) Air pollution permits are not required for agricultural operations.
A)True
B)False
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Chapter 22: The International Legal Environment of Business
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Sample Questions
Q1) One area in which the U.S. was not successful in gaining trading concessions from its WTO partners to reduce trade barriers was in:
A) construction equipment
B) film and television programming
C) civil aviation
D) agriculture
E) steel
Q2) In the Middle Ages, the private international law of commercial transactions was known as the lex populi.
A)True
B)False
Q3) Who is responsible for criminal enforcement of the Foreign Corrupt Practices Act:
A) the Secretary of State
B) the Secretary of Trade
C) the Department of Justice
D) the Bureau of Trade Management
E) the Supreme Court
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Page 24