Ethics and Law in Business Final Exam
Course Introduction
Ethics and Law in Business explores the fundamental principles of ethical decision-making and the legal frameworks that govern business activities. The course examines the relationship between ethical theories, social responsibility, and legal requirements, analyzing how businesses can navigate complex moral and legal dilemmas in a globalized environment. Through case studies and real-world examples, students learn to identify and address issues such as corporate governance, regulatory compliance, consumer protection, labor rights, and environmental sustainability, equipping them with the skills to make responsible and legally sound decisions in their professional careers.
Recommended Textbook
Business Its Legal Ethical and Global Environment 10th Edition by Marianne M. Jennings
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2597 Verified Questions
2597 Flashcards
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Chapter 1: Introduction to Law
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108 Verified Questions
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Sample Questions
Q1) The European Union:
A) was disbanded by GATT.
B) is an organization of European countries.
C) has established trade barriers.
D) has strict customs controls among the members.
Answer: B
Q2) Scalping ordinances are an example of criminal laws.
A)True
B)False
Answer: True
Q3) Which of the following is not an example of a law that promotes order?
A) disclosure statutes for securities sales
B) curfew
C) speed limits
D) trespassing laws
Answer: A
Q4) The scholars of jurisprudence generally agree on the theory of law.
A)True
B)False
Answer: False
Page 3
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Chapter 2: Business Ethics and Social Responsibility
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Sample Questions
Q1) Sarah Blankenship was traveling for business. She took a cab from the office where she was doing her company assignment to the airport. As she paid the cab driver, she asked for a receipt and the driver insisted that she take two receipts, one that was blank so that she could fill it in and "get a little extra from her company for travel reimbursement." Sarah accepted the blank receipt and wonders if there would be any problem in submitting for reimbursement for an extra cab ride. "It wouldn't be a lot," she thinks to herself, "just a little bit that I can say was for purposes of getting to dinner one night while I was there." Which of the following best describes Sarah's situation?
A) The cab driver committed the ethical breach, not Sarah, so she should use the receipt.
B) There are many unreimbursed expenses when you travel for your company, so the extra receipt is a way of recouping those expenses.
C) If Sarah submits the extra receipts for reimbursement she is taking something that does not belong to her.
D) Sarah should save the receipt and use it another time when she forgets to get a receipt.
Answer: C
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4
Chapter 3: The Judicial System
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Sample Questions
Q1) Sarah Sajak was sexually harassed at work. She filed a claim with the EEOC under Title 42 of the United States Code. The EEOC has given her a right to sue letter, a requirement for her to be able to bring suit for damages for the harassment. In which court must Sarah file her claim?
A) State trial court
B) Federal administrative court
C) Federal district court
D) Federal court of appeals since the agency has heard the case
E) none of the above
Answer: C
Q2) Decisions of the federal district court are reported in the Federal Reporter.
A)True
B)False
Answer: False
Q3) Regional reporters carry the opinions of state appellate and supreme court decisions.
A)True
B)False
Answer: True
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Page 5
Chapter 4: Managing Disputes: Alternative Dispute
Resolution and Litigation Strategies
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Sample Questions
Q1) The standard for admitting expert testimony in a trial is:
A) the judge must find the expert is reliable.
B) the judge must fine that the expert's testimony is relevant.
C) all expert testimony is admitted.
D) both a and b
Q2) Which of the following methods of alternative dispute resolution involves a hearing?
A) arbitration
B) mediation
C) negotiated settlement
D) settlement conference
E) All of the above involve hearings.
Q3) A motion to dismiss must be filed before an answer is filed.
A)True
B)False
Q4) The results of mediation are generally binding.
A)True
B)False
Q5) Discuss the issues for businesses concerning potential litigation and portable devices such as smartphones and laptops.
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Chapter 5: Business and the Constitution
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Sample Questions
Q1) Substantive due process is the same as procedural due process.
A)True
B)False
Q2) Spiegel, Inc., has a catalog merchandise return facility in Nevada. Spiegel employs many phone operators for processing return requests, and merchandise is returned to the facility and stored there for later dispatch. The state of Nevada has proposed taxing Spiegel's full inventory based on the theory that it could have passed through the Nevada facility. Spiegel's main warehouse is in Chicago, Illinois. Nevada:
A) has the power to tax Spiegel's full inventory because of its location in the state.
B) has the power to tax Spiegel so long as all merchants in Nevada are taxed the same way.
C) has properly apportioned its tax since it only applies to inventory and not income.
D) does not have the authority under the U.S. Constitution to tax Spiegel's full inventory.
Q3) Discuss the ruling and the importance of Citizen's United.
Q4) Analyze and discuss why the top corporate and trade PACs are the top political contributors.
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Page 7
Chapter 6: Administrative Law
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Sample Questions
Q1) The 30-day comment period can be waived for emergency rulemaking.
A)True
B)False
Q2) Given deregulation in several major industries, why has the total amount of regulations still increased virtually every year?
Q3) If the Department of Labor decides to change the content and approach of the proposed rules based on feedback, which of the following is correct?
A) The Department must return to Congress to get approval for the proposed changes to the original rules.
B) The Department must allow 90 days for comments on the proposed changes to the original rules.
C) The Department must publicize the proposed changes in the original rules and allow a comment period.
D) Because the rules could not be promulgated, Congress can revoke the Nursing Mothers Law.
Q4) Informal rule making does not require publication of proposed rules.
A)True
B)False
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Chapter 7: International Law
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Sample Questions
Q1) Sovereign immunity protects individual nation's operations from outside interference.
A)True
B)False
Q2) Under the doctrine of sovereign immunity, a country cannot be forced to answer civil or criminal charges in a U.S. court.
A)True
B)False
Q3) The FCPA does not make which of the following acts criminal?
A) giving money to a foreign political candidate
B) giving a gift of clothing to a foreign political official
C) giving money as a means of preventing action from being taken
D) giving a payment for facilitation
Q4) The Justice Department does not offer any assistance to companies with questions about Foreign Corrupt Practices Act requirements.
A)True
B)False
Q5) Why are pirates so difficult to prosecute?
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Chapter 8: Business Crime
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Sample Questions
Q1) Mr. Parnell entered a not guilty plea to the charges. Which of the following would have been the forum for entering that plea?
A) Grand jury
B) Preliminary hearing
C) Arraignment
D) Initial appearance
Q2) An indictment is:
A) a document issued by the grand jury.
B) issued after a preliminary hearing.
C) followed by an information.
D) none of the above
Q3) Which of the following crimes has been curbed back by appellate court decisions on corporate financial misstatements and officer liability?
A) Honest services fraud
B) SOX financial certification provisions
C) Obstruction of justice
D) Criminal fraud
Q4) Explain the changes Sarbanes-Oxley made to criminal laws.
Q5) Discuss the procedural changes made as a result of Arizona v. Gant.
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Chapter 9: Business Torts
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Sample Questions
Q1) Keller has applied for a position at a summer camp for girls, ages 14-18. The camp director had called Radical Board's manager and asked for a reference on Keller.
A) Radical Board has no liability if it simply verifies Keller's employment there.
B) Radical Board has liability for its failure to prosecute Keller.
C) Radical Board has no liability for the actions of employees beyond their job description.
D) Radical Board enjoys a privilege against defamation if it discloses the peep hole story. E) none of the above
Q2) Three boys were leaving Wal-Mart when they were stopped by plain clothes security officers. One officer said, "Those shirts that you have on were stolen." One boy said, "You can't be serious." The officer responded, "Yes, I am. Come with me." The boys then went with the officers to a side door and into an office. The boys' parents have filed suit against Wal-Mart. Discuss what their suit might be for and what defenses Wal-Mart has.
Q3) Comparative negligence reduces the plaintiff's recovery.
A)True
B)False
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Page 11
Chapter 10: Cyberlaw, Social Media, and Privacy
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Sample Questions
Q1) Employees are not required to give consent to employer access to their e-mails under the Stored Communications Act.
A)True
B)False
Q2) The FBI wants to conduct a search of your work computer. To do so:
A) the FBI needs your permission.
B) the FBI needs a warrant.
C) either a or b
D) both a and b
Q3) E-merchants need not follow the same FTC rules that apply to catalog merchants.
A)True
B)False
Q4) Servers are always required to reveal the identity of their customers and users.
A)True
B)False
Q5) Cyberspace companies are exempt from the consumer privacy rules on use of consumer information and sale of consumer lists.
A)True
B)False
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Chapter 11: Environmental Regulation and Sustainability
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Sample Questions
Q1) The federal government is required to build a border fence along the U.S. and Mexican border. As construction began, several environmental groups brought suit because the Army Corps of Engineers and the Department of Homeland Security had not complied with federal law. Which of the following federal laws would the two agencies have to comply with before constructing the wall?
A) They would need to do due diligence on the land before building the fence.
B) They would need to do an EIS.
C) They would need to designate any area where the fence is located as a brownfield.
D) both b and c
Q2) State environmental laws are always superceded by the federal environmental laws. A)True
B)False
Q3) The parent corporation could have CERCLA liability for a subsidiary. A)True
B)False
Q4) The Federal Partnership Action Agenda provides funding for brownfield projects.
A)True
B)False
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Page 13
Chapter 12: Contracts and Sales: Introduction and Formation
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Sample Questions
Q1) Which of these can be a valid contract agreement under ESIGN?
A) A fax
B) A PDF file
C) An online click or check on an "I accept" button
D) All of the above
Q2) A contract for the sale of a car for $700, under the old UCC, must be in writing to be enforceable.
A)True
B)False
Q3) "I'll take the bike for $75, but first I have to sell my fish tank," is an example of a valid acceptance.
A)True
B)False
Q4) Under CARD, the terms of the credit card must be:
A) sent to the customers.
B) printed on paper.
C) posted on the Internet.
D) all of the above.
Page 14
Q5) List the federal laws regulating credit contracts and give a brief description of each.
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Chapter 13: Contracts: Performance, Remedies, and Rights
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Sample Questions
Q1) Angela, age 17, is injured in a car accident and receives $5,200 in medical treatment at the emergency room. The hospital sends a bill to Angela, who signed the admitting form in which she agreed to pay for the treatment. Angela:
A) is a minor and need not pay the bills.
B) is liable for the bill as a necessity.
C) can rescind the agreement.
D) none of the above
Q2) RaeAnn and Rick Telford purchased an existing home in a neighborhood of multi-million-dollar homes. After moving in, the Telfords learned that the home had been owned formerly by a couple that was indicted for drug trafficking. The home had been raided by DEA agents, and there had been a shoot-out before the couple was taken into custody. The couple's youngest child was killed in the house during the shootÂout. RaeAnn and Rick:
A) have no recourse if there is nothing physically wrong with the house.
B) have a remedy of damages or rescission if this information was withheld from them.
C) have no remedy because neither sellers nor brokers are required to disclose psychological issues with properties.
D) none of the above
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Chapter 14: Sales: Product Advertising and Liability
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Sample Questions
Q1) An internal memo in a company that acknowledges the risk of a product prior to the product's release without any kind of change establishes proof for punitive damages under a negligence theory of product liability.
A)True
B)False
Q2) In comparative advertising, a company cannot be held liable for misrepresentations regarding products other than its own.
A)True
B)False
Q3) The FTC Improvements Act of 1980:
A) expanded the FTC's authority to regulate advertising.
B) limited the FTC's authority on regulation of advertising.
C) eliminated the FTC's authority to require corrective ads.
D) none of the above
Q4) Misuse of a product is a defense in a product liability suit.
A)True
B)False
Q5) In the Nestle case, what ethical issues existed?
Q6) Describe three defenses to product liability.
Page 16
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Chapter 15: Products: Business Intellectual Property
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Sample Questions
Q1) Software copyrights cover the underlying programs of the software.
A)True
B)False
Q2) Trade secrets:
A) are registered for 14 years.
B) are good for 75 years.
C) need not be registered to be protected.
D) are the same as trademarks.
Q3) The golden arches of McDonald's restaurants are an example of:
A) a patent.
B) a copyright.
C) a license.
D) trade dress.
Q4) The Sonny Bono Copyright Extension Act does not apply to films.
A)True
B)False
Q5) The laws of the United States on patent protection do not comply with GATT.
A)True
B)False
Q6) Discuss the potential penalties under the Industrial Espionage Act.
Page 17
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Chapter 16: Business Competition: Antitrust
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Sample Questions
Q1) Several law firms in the Detroit area have met and agreed not to charge more than $200 for a simple will so that they can more effectively compete with the increasing number of legal clinics. The agreement for a price maximum is:
A) not an antitrust violation because the public benefits from maximum prices.
B) not an antitrust violation because it is a service and not a sale of goods.
C) price fixing and an antitrust violation.
D) none of the above
Q2) Meeting the competition is a defense to price discrimination.
A)True
B)False
Q3) Fair trade contracts are:
A) valid.
B) permitted under state laws.
C) an issue related to resale price maintenance.
D) none of the above
Q4) Monopolization is a vertical restraint of trade.
A)True
B)False
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Chapter 17: Management of Employee Conduct: Agency
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Sample Questions
Q1) Under apparent authority:
A) a principal is never liable for the acts of an agent.
B) a principal is liable for creating the appearance of an agency relationship.
C) there is no agency relationship.
D) none of the above
Q2) The presence of a master-servant relationship determines whether or not a principal must pay wage taxes and withhold income taxes.
A)True
B)False
Q3) Hayley Franken works at Big Burger after school and on weekends. With her heavy course load, her job and being on the basketball team, Hayley finds that she is simply worn out most of the time. She has said to her manager at work, " Sometimes I am not even sure how I drive myself home because I want to sleep so much." Hayley worked a double shift at Big Burger and did not leave until 2 AM, 4 hours beyond her usual quitting time. On the way home, she apparently dozed off and struck another car head-on and was killed. Her parents are suing Big Burger for wrongful death. Discuss the liability issues.
Q4) Discuss the requirements for ending an agency relationship.
Q5) Discuss why the peer review procedure is successful in some companies.
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Chapter 18: Governance and Structure: Forms of Doing Business
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Sample Questions
Q1) A limited partnership:
A) requires at least one general partner.
B) can be created by implication.
C) must be run by the limited partners.
D) all of the above
Q2) A partner's interest:
A) is the same as the partnership property.
B) cannot be attached by creditors.
C) cannot be transferred.
D) none of the above.
Q3) Dissolution of a partnership is termination of a partnership.
A)True B)False
Q4) Allied Van Lines has structured its company by giving its franchisees stock ownership in the company. On the stock is the following language: NOTE: Restrictions apply to ownership of this stock. Only franchisees and employees of Allied Van Lines can own this stock. In the event of a franchise or employment termination, the stock must first be offered to the Allied Board for purchase. Is the restriction valid?
20
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Chapter 19: Governance and Regulation: Securities Law
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Sample Questions
Q1) A limited partnership interest is not considered a security.
A)True
B)False
Q2) Lund was the CEO of Verit Co. Lund was contacted by Horowitz, the CEO and Chairman of the Board of P & F. Horowitz told Lund of an opportunity P & F had to buy into a Las Vegas casino. Lund immediately purchased 10,000 shares of P & F. Three days after Lund's purchase, P & F announced its intentions to enter into a joint venture for a Las Vegas casino. Lund was then able to sell his shares for considerable profit. Discuss the propriety of Lund's actions under the 1934 Act.
Q3) Accounting firms must register annually with PCAOB if they want to audit publicly traded companies.
A)True
B)False
Q4) Only those who actually signed the registration statement can be liable for a Section 11 violation.
A)True
B)False
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21
Chapter 20: Management: Employee Welfare
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Sample Questions
Q1) The legal trend in overtime pay requirements is to expand the number of employees covered.
A)True
B)False
Q2) Arleen Ray is starting a new business. She will operate a children's clothing store and will need to cover the store with sales help from 10:00 AM to 9:00 PM Monday through Friday and from 1:00 PM to 6:00 PM on Saturdays and Sundays. She has several questions about her yet-to-be work force.
(a) What is the maximum number of hours each employee can work? (b) When will she be required to pay overtime?
(c) What is the minimum wage requirement?
(d) Will the employees be covered under state workers' compensation laws? (e) Will Arleen be required to handle withholding for the employees?
Q3) Which of the following is not a function of OSHA?
A) promulgating safety standards for the workplace
B) conducting random inspections of workplaces
C) responding to employee complaints
D) All of the above are functions of OSHA.
Q4) Discuss when OSHA will find willful violations.
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Chapter 21: Management: Employment Discrimination
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Sample Questions
Q1) List all the possible defenses to charges of discrimination.
Q2) Seniority systems:
A) were outlawed under Title VII.
B) are violations of the Age Discrimination Act.
C) can be valid if they are not used to perpetuate past discrimination.
D) none of the above
Q3) The prohibitions on sex discrimination apply only to:
A) job hiring decisions.
B) promotions.
C) wage increases.
D) a, b, and c
E) none of the above
Q4) An insurance company that prohibits female employees from working as estimators, but not men has discriminated by disparate treatment.
A)True
B)False
Q5) Title VII provisions do not apply to decisions on admitting employees as partners.
A)True
B)False
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