Business Ethics and Law Test Preparation
Course Introduction
Business Ethics and Law explores the foundational principles and practical applications of ethical decision-making and legal frameworks in the business world. The course examines key ethical theories, moral responsibilities of organizations, and current legal regulations affecting business conduct, including contracts, employment law, corporate governance, and intellectual property. By analyzing real-world cases and dilemmas, students learn to navigate complex situations where business objectives intersect with ethical considerations and legal requirements, equipping them with skills to promote responsible and sustainable business practices.
Recommended Textbook
The Legal Environment of Business 11th Edition by Roger E. Meiners
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22 Chapters
9813 Verified Questions
9813 Flashcards
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Page 2
Chapter 1: Todays Business Environment: Law and Ethics
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327 Verified Questions
327 Flashcards
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Sample Questions
Q1) An important state law affecting the legal regulation of business is the Uniform Commercial Code.
A)True
B)False
Answer: True
Q2) Law is intended to be independent of the social values of members of society.
A)True
B)False
Answer: False
Q3) The doctrine of stare decisis means that decisions in past cases will be followed in resolving present cases.
A)True
B)False
Answer: True
Q4) Substantive law includes the common law.
A)True
B)False
Answer: True
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Page 3
Chapter 2: The Court Systems
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437 Verified Questions
437 Flashcards
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Sample Questions
Q1) Many states provide small claims courts.These courts:
A)have limited jurisdiction
B)hear cases involving a relatively small amount of money
C)only hear cases involving certain subjects
D)are less formal than other courts
E)all of the other choices are correct
Answer: E
Q2) In the French court system,the top court,cour de cessation:
A)does not have the authority to pronounce judgment
B)may strike down any act of the legislature or the president
C)may pronounce new sections of the codes to replace existing code sections
D)may reverse decisions of the International Court of Justice
E)all of the other choices are correct
Answer: A
Q3) A court can exercise jurisdiction over a corporate defendant if the court is located in the state in which the corporation has a production plant.
A)True
B)False
Answer: True
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Page 4
Chapter 3: Trials and Resolving Disputes
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508 Verified Questions
508 Flashcards
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Sample Questions
Q1) The least formal method of alternative dispute resolution is:
A)court-annexed arbitration
B)mini-trial
C)mediation
D)arbitration
E)none of the other choices are correct
Answer: E
Q2) Before the case goes to the jury,the attorneys of both parties present:
A)the voir dire
B)the summary discussion
C)the hearsay evidence
D)the rebuttal evidence
E)none of the other choices are correct
Answer: E
Q3) Before a jury has retired to consider its verdict,either party may ask the court to grant a directed verdict based on the evidence.
A)True
B)False
Answer: True
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Page 5
Chapter 4: The Constitution: Focus on Application to Business
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Sample Questions
Q1) The most important part of the Constitution with respect to businesses is:
A)Article I,Section 9
B)Article I,Section 7
C)Article II,Section 8
D)Article II,Section 9
E)Article I,Section 8
Q2) The Fifth Amendment protects individuals against:
A)illegal search and seizure
B)self-incrimination
C)excessive fines
D)trial without a jury
E)none of the other choices
Q3) In Consolidated Edison Co.v.Public Service Comm. ,the Supreme Court held that state utility regulators could impose restrictions on the time,place or manner in which political speech was delivered so long as the restriction was "reasonable."
A)True
B)False
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Page 6
Chapter 5: Criminal Law and Business
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330 Verified Questions
330 Flashcards
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Sample Questions
Q1) Financial fraud is a civil,not criminal,matter.
A)True
B)False
Q2) Only individuals,not corporations,can be charged with white collar criminal offenses.
A)True
B)False
Q3) Acts may be designed as crimes by either the federal or state governments.
A)True
B)False
Q4) A large percentage of criminal cases are settled by plea bargains.
A)True
B)False
Q5) Miranda rights for those arrested and accused of or suspected of a crime do not include:
A)the right to be represented by counsel
B)the right to be released
C)being informed that statements made may be used against the accused
D)the right to remain silent
E)all of the other choices are included in the Miranda rights
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Chapter 6: Elements of Torts
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474 Verified Questions
474 Flashcards
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Sample Questions
Q1) Mary is running for the School Board.Joe tells people that Mary was convicted of prostitution several times.This is true,but the revelation is distressing to Mary who is now successful in business and has put her past behind her.Most likely,Mary will:
A)win a libel suit against Joe
B)win a slander suit against Joe
C)win a false imprisonment suit against Joe
D)win a defamation suit against Joe
E)lose a suit for a,b,c,or d against Joe
Q2) In Fuerschbach v.Southwest Airlines,where Fuerschbach was "arrested" at work as part of a prank,the appeals court held that if Fuerschbach's "personal dignity" was offended,then the tort of battery may have occurred.
A)True
B)False
Q3) Torts based on negligence protect people from:
A)harm from others' unintentional but legally careless conduct
B)willful disregard for customer safety
C)accidental consumer injury due to the misuse of a product
D)all of the specific choices
E)none of the other specific choices
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Page 8
Chapter 7: Business Torts and Product Liability
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376 Verified Questions
376 Flashcards
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Sample Questions
Q1) The Restatement (Third)of Torts on product defect recommends that a risk-utility balancing test be used.
A)True
B)False
Q2) To avoid being sued for failure to warn manufacturers must:
A)take lots of precautions in the manufacturing process
B)invest a lot in safety research
C)conduct regular customer satisfaction surveys
D)have mandatory safety training sessions for all employees
E)provide adequate warning labels and instructions on products
Q3) The __________________ holds that the bulk supplier has a duty to take reasonable steps to insure that its buyer is knowledgeable and equipped to provide warnings to the ultimate users,but it does not have to police the details of what is done as the product continues down the chain of use.
A)commercial-supplier doctrine
B)final-supplier doctrine
C)bulk-supplier doctrine
D)small-scale supplier doctrine
E)Wal-Mart-supplier doctrine
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Page 9
Chapter 8: Real and Personal Property
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431 Verified Questions
431 Flashcards
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Sample Questions
Q1) When a wrongdoer harms a person's interest in land or personal possessions,this is referred to as:
A)a misdemeanor
B)a contractual breach
C)breach of fiduciary duty
D)a libel against the person
E)none of the other choices
Q2) Zoning is the primary method of local government land control.
A)True
B)False
Q3) The power of eminent domain means:
A)the government must build housing for the poor
B)the use of property is controlled by zoning
C)owners of other property make a legal claim against public land
D)land is registered to its private owner
E)none of the other choices
Q4) When titles and deeds are recorded,the county or state office checks for accuracy.
A)True
B)False
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Chapter 9: Intellectual Property
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411 Verified Questions
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Sample Questions
Q1) In Nystrom v.Trex Company,where Nystrom sued Trex Company for copyright infringement on his patented flooring boards,the appeals court held that:
A)Nystrom's patent was limited to wooden boards and since Trex Company's boards were not wooden,there was no infringement
B)Trex Company's patent was not limited to wooden boards and so the district court's summary judgment of noninfringement could not stand
C)Nystrom's patent had expired
D)Nystrom's patent had been incorrectly granted
E)none of the other choices are correct
Q2) Rights of literary property as recognized by law are:
A)copyrights
B)patents
C)estates
D)literary rights
E)media rights
Q3) There are utility patents and design patents.
A)True
B)False
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11
Chapter 10: Contracts
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593 Verified Questions
593 Flashcards
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Sample Questions
Q1) An employer can avoid liability for on-the-job injuries so long as fully informed workers sign exculpatory agreements.
A)True
B)False
Q2) Restitution is an equitable remedy that may be used to prevent unjust enrichment when one party accepts benefits provided by another that were not under contract.
A)True
B)False
Q3) If most,but not all,of the obligations of a contract have been finished the contract is considered in breach until completed.
A)True
B)False
Q4) In Parker v.Glosson,involving an offer to buy a truck stop business,the appeals court held that either the husband or the wife who owned the business could form a binding contract to sell the business.
A)True
B)False
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Page 12
Chapter 11: Domestic and International Sales
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432 Verified Questions
432 Flashcards
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Sample Questions
Q1) Under the UCC a buyer who receives good that are nonconforming:
A)may reject them and withhold payment
B)may cancel the contract and recover from the seller any prepayments
C)must notify the seller of a rejection in a timely manner to allow the seller to either cure the non-conformities or reclaim the goods
D)all of the other specific choices
E)none of the other choices
Q2) During negotiations,the seller may induce the buyer to buy goods by making claims or by taking other actions.When those statements or actions relate to the quality,condition,or performance of the goods,the seller creates an express warranty.
A)True
B)False
Q3) Lex mercatoria refers to:
A)medieval European rules governing trade issues
B)ancient Greek rules governing trade issues
C)modern Japanese law governing trade issues
D)the Supreme Court's views on trade issues
E)medieval European rules governing land rental
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Chapter 12: Negotiable Instruments, credit, and Bankruptcy
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543 Verified Questions
543 Flashcards
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Sample Questions
Q1) A(n)______________ functions as a substitute for cash.
A)parley
B)easement
C)debtor instrument
D)notable instrument
E)none of the other choices are correct
Q2) The final stage of bankruptcy is known as:
A)disruption in bankruptcy
B)removal in bankruptcy
C)distancing of the debtor
D)discharge in bankruptcy
E)divorce from the proceedings
Q3) Nonnegotiable instruments are governed by:
A)the Supreme Court
B)the CISG
C)the common law of contracts
D)the common law of arbitration
E)none of the other choices are correct
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14
Chapter 13: Business Organizations
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Sample Questions
Q1) The resolutions that shareholders vote on at shareholder meetings are advisory to the board.
A)True
B)False
Q2) Refer to Fact Pattern 13-1.If Jeanette decides to go into business with her friend Maia,Richard suggests that the two establish a partnership to carry on their business.If they do,this means both:
A)are co-owners of the business
B)share control over the profits of the business
C)have limited liability for the debts of the business
D)are co-owners of the business and share control over the profits of the business
E)are co-owners of the business and share control over the profits of the business and have limited liability for the debts of the business
Q3) The articles of incorporation set the rules that regulate the internal structure of a corporation.
A)True B)False
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Chapter 14: Agency and the Employment Relationship
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Sample Questions
Q1) Which of the four general factors which bear upon whether a master-servant relationship exists is determinative:
A)selection and engagement of the servant
B)payment of compensation
C)power of dismissal
D)power of control
E)all of the other specific choices are determinative
Q2) An employment of an agent for the purpose of representation in establishing relations between a principal and third parties is known as a(n):
A)third party relationship
B)principal relationship
C)representative relationship
D)real relationship
E)none of the other choices are correct
Q3) In Yin v.J's Fashion Accessories,the court found that Yim was an undisclosed agent for his company,Hosung,but was liable for debts owed by Hosung,the principal.
A)True
B)False
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Chapter 15: The Regulatory Process
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345 Verified Questions
345 Flashcards
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Sample Questions
Q1) Administrative agencies are often created by Congress because:
A)they can consider technical details more effectively than Congress
B)they can handle litigation more quickly than can the judicial system
C)they have the ability to monitor a regulated industry on a continuous basis
D)they can consider technical details more effectively than Congress and have the ability to monitor a regulated industry on a continuous basis
E)they can consider technical details more effectively than Congress and have the ability to monitor a regulated industry on a continuous basis and can handle litigation more quickly than can the judicial system
Q2) Administrative rules are classified as substantive (legislative),interpretative,and:
A)regulatory
B)investigative
C)prospective
D)procedural
E)none of the other choices
Q3) Interpretative rules may never be challenged by parties affected by such rules.
A)True
B)False
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Chapter 16: Employment and Labor Regulations
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551 Verified Questions
551 Flashcards
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Sample Questions
Q1) If over half of the employees at a workplace vote for union representation,the NLRB will:
A)hold an election to determine which union workers want to represent them
B)certify the union as the exclusive bargaining agent for the employees who voted for the union and require those who voted for the union to join it
C)certify the union as the exclusive bargaining agent for all employees and require all employees to join the union
D)certify the union as the exclusive bargaining agent for the employees who voted for the union,whether they join the union or not
E)none of the other choices
Q2) The Taft-Hartley Act does not prohibit unions from which activity:
A)coercing employees to support a union
B)refusing to bargain in good faith with employers about wages and working conditions
C)working to expand union activity to more bargaining units
D)secondary boycotts
E)all of the other choices are prohibited
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Chapter 17: Employment Discrimination
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Sample Questions
Q1) San Francisco's civil rights law that prohibits employment discrimination based on height or weight is an example of:
A)a prohibited practice of having different civil rights laws for different cities
B)the federal government extending discrimination coverage in a certain area
C)a city's illegal extension of discrimination coverage beyond Title VII
D)a city's extension of discrimination coverage beyond Title VII
E)none of the other choices are correct
Q2) Reverse discrimination-giving preferential treatment to minorities or women-is not illegal as that is one of the goals of Title VII.
A)True
B)False
Q3) Under Title VII,there is an official list of races.
A)True
B)False
Q4) A standardized employment test that tends to screen out people with disabilities is likely to be illegal under the Americans with Disabilities Act.
A)True
B)False
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Chapter 18: Environmental Law
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506 Verified Questions
506 Flashcards
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Sample Questions
Q1) To comply with the Clean Water Act,businesses that discharge wastes into a waterway must:
A)follow the requirements of the State Implementation Plan
B)install the lowest achievable emissions rate technology by 2009 (or sooner if feasible)
C)obtain a discharge permit and meet the effluent limits set by EPA for each chemical
D)dispose of liquid wastes by strictly following common industry practices
E)comply with the specific terms of its PSD permit
Q2) In a pollution case involving a public nuisance,the right held in common by the public that has likely been violated is the:
A)community's right to a reasonably clean and safe environment
B)community's right to a sterile environment
C)community's right to a health-promoting environment
D)community's right to an allergen-free environment
E)community's right to a peaceful environment
Q3) The EPA placed over 1,000 sites on the Superfund National Priority List for cleanup.
A)True
B)False
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Page 20
Chapter 19: Consumer Protection
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498 Verified Questions
498 Flashcards
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Sample Questions
Q1) The FTC's Red Flag Rule requires notices to consumers when interest rates are about to be increased on a credit account.
A)True
B)False
Q2) The Food,Drug and Cosmetic Act of 1938 gave the FDA broad powers to regulate food production and prohibit false advertising of drugs.
A)True
B)False
Q3) In Chuway v.National Action Financial Services,where Chuway received a letter from debt collector National that requested payment of the amount she owed on a debt,the appeals court held that the debt collector:
A)violated the FDCPA by sending the plaintiff multiple letters after she requested they stop
B)violated the FDCPA by not clearly establishing the amount of the debt
C)did not violate the FDCPA because the language of the letter was clear
D)clearly used safe harbor language and so did not violate the FDCPA
E)used reasonable language for the situation and so did not violate the FDCPA
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Page 21
Chapter 20: Antitrust Law
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Sample Questions
Q1) In the case of U.S.v.Baker Hughes,concerning a merger of hardrock hydraulic underground drilling rig makers,the court held that the proposed merger:
A)should not be stopped because survival of the industry was important to national security
B)should be stopped because the sellers would have over 75% of the market
C)should be stopped because buyers had insufficient power to insure competitive prices
D)should be stopped because the market was saturated with such firms
E)none of the other choices
Q2) Which of the following groups could promote a boycott:
A)consumers
B)union members
C)retailers
D)wholesalers
E)all of the other specific choices are possible
Q3) Tying sales are prohibited by the Clayton Act.
A)True
B)False
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Chapter 21: Securities Regulation
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456 Verified Questions
456 Flashcards
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Sample Questions
Q1) Fraud in securities dealings may be litigated under:
A)common law fraud rules
B)SEC Rule 10b-5
C)SEC Rule 246
D)common law fraud rules or SEC Rule 10b-5
E)common law fraud rules or SEC Rule 10b-5 or SEC Rule 246
Q2) Almost all disputes between registered investment advisers or investment firms and their client investors must be settled by arbitration;there is rarely a chance to go to court to settle the matter.
A)True
B)False
Q3) Which of the following is NOT a type of investment company as defined by the Investment Company Act:
A)face-amount certificate company
B)"no-load" company
C)management company
D)all of the other specific choices are types of investment companies
E)none of the other specific choices are correct
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23
Chapter 22: The International Legal Environment of Business
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336 Verified Questions
336 Flashcards
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Sample Questions
Q1) An example of a U.S.company that makes great use of contract manufacturing is:
A)Singer Sewing Machines
B)John Deere Tractor Company
C)Universal Studios
D)Nike
E)Texas Instruments
Q2) In the Middle Ages,the private international law of commercial transactions was known as the lex populi.
A)True
B)False
Q3) Which of the following is usually part of the documentation required for payment from a buyer's bank when a letter of credit has been issued:
A)a certificate of origin
B)a commercial invoice
C)an export license
D)a certificate of inspection
E)all of the other choices are correct
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Page 24