Law and Ethics in the Business Environment Exam Practice Tests
Course Introduction
Law and Ethics in the Business Environment explores the legal and ethical frameworks that shape decision-making processes within organizations. This course examines key concepts in business law, such as contracts, torts, agency, and regulatory compliance, alongside ethical theories and moral reasoning as they apply to contemporary business dilemmas. Students will analyze case studies involving issues like corporate social responsibility, workplace discrimination, intellectual property, and environmental sustainability, developing a critical understanding of how legal obligations intersect with ethical considerations. By fostering ethical awareness and legal literacy, the course prepares students to navigate complex challenges in todays business world and to make responsible, informed choices as future professionals.
Recommended Textbook
Business Law Text Cases An Accelerated Course 14th Edition by Roger LeRoy Miller
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Page 2
Chapter 1: Law and Legal Reasoning
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Sample Questions
Q1) Rupert is a victim of Sara's violation of a criminal law. Criminal law is concerned with A) the prosecution of private individuals by other private individuals.
B) the prosecution of public officials by private individuals.
C) the relief available when a person's rights are violated.
D) wrongs committed against the public as a whole.
Answer: D
Q2) Stare decisis is a doctrine obligating judges to help persons who have failed to protect their own rights.
A)True
B)False Answer: False
Q3) A key to avoiding business disputes is to go ahead without thinking ahead.
A)True
B)False
Answer: False
Q4) In most states, the courts no longer grant "equitable" remedies.
A)True
B)False Answer: False
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Chapter 2: Business and the Constitution
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Sample Questions
Q1) Orinoco.com, an online seller of a variety of consumer streaming products, files a suit against the state of Nevada, claiming that a Nevada state law violates the commerce clause. The court will agree if the statute imposes a substantial burden on A) the local government.
B) interstate commerce.
C) noneconomic activity.
D) the state.
Answer: B
Q2) The Constitution expressly delegated to the states the power to regulate interstate commerce.
A)True
B)False
Answer: False
Q3) Under the Constitution, the judicial branch is responsible for foreign affairs.
A)True
B)False
Answer: False
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Chapter 3: Courts and Alternative Dispute Resolution
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Sample Questions
Q1) As a judge in a federal court, Elena can decide, among other things, whether the laws or actions of the executive and legislative branches are constitutional. The process for making this determination is known as
A) judicial review.
B) jurisdiction.
C) jurisprudence.
D) justifiability.
Answer: A
Q2) First Community Credit Union and General Hydraulics. Inc., have their dispute resolved in arbitration. Before determining the award, the arbitrator meets with First Community's representative to discuss the dispute without General Hydraulics' representative being present. If this meeting substantially prejudices General Hydraulics' rights, a court will most likely
A) compel arbitration.
B) review the merits of the dispute.
C) review the sufficiency of the evidence.
D) set aside any award.
Answer: D
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Page 5
Chapter 4: Tort Law
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Sample Questions
Q1) To avoid liability for negligence, a business owner must protect its customers against all risks.
A)True
B)False
Q2) Defense of others is a defense to an allegation of battery.
A)True
B)False
Q3) Elise, an emergency medical technician renders aid to a participant in Forest Trail Marathon, an athletic event. Regarding a suit by the participant against Elise for negligence, Elise is immune from liability under
A) no circumstances.
B) the doctrine of res ipsa loquitur.
C) the "danger invites rescue" doctrine.
D) an applicable Good Samaritan statute.
Q4) Only persons who are explicitly invited onto a business's premises are considered business invitees.
A)True
B)False
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Page 6
Chapter 5: Criminal Law and Cyber Crime
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Sample Questions
Q1) The Fourth Amendment protects against unreasonable searches by the government.
A)True
B)False
Q2) Suzu, an employee of Ridgeline Credit Union, deposits into her personal account checks entrusted to Ridgeline through its ATM system by customers to deposit into their accounts. This is
A) burglary.
B) embezzlement.
C) larceny.
D) mail and wire fraud.
Q3) Felonies are punishable by imprisonment for more than a year or death.
A)True
B)False
Q4) Bond, the owner of CinePlex, trusts Dex to manage the theater's daily cash flow. One night, without Bond's knowledge or consent, Dex takes and keeps $1,000 from the receipts. This is most likely
A) embezzlement.
B) larceny.
C) robbery.
D) burglary.
Page 7
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Chapter 6: Business Ethics
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Sample Questions
Q1) Ross, a research manager for Stock & Bond Investments, Inc., adheres to utilitarian ethics. Ross will determine that an action is morally correct when it produces the greatest good for A) Ross.
B) Stock & Bond Investments.
C) the fewest people.
D) the most people.
Q2) Ethical standards would most likely be considered violated if Team Logos Merchandising Corporation deals with a company in a developing nation that A) agrees to produce goods at Team Logos's desired price.
B) goes unnoticed by "corporate watch" groups.
C) routinely violates labor and environmental standards.
D) pays its workers less than the U.S. minimum wage.
Q3) Business ethics looks at the decisions that businesses make or have to make and whether those decisions are right or wrong.
A)True
B)False
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Chapter 7: Nature and Terminology
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Sample Questions
Q1) Clay offers to pay Dian $50 for a golf lesson for Ewan. They agree to meet on Friday to exchange the cash for the lesson. These parties have
A) a bilateral contract.
B) a unilateral contract.
C) a void contract.
D) an executive contract.
Q2) One of the requirements of a valid contract is an adequate price.
A)True
B)False
Q3) An offer may not be revoked until it is accepted.
A)True
B)False
Q4) A letter-of-credit agreement between Rural Feed Corporation and Soy Farms, Inc., requires Rural's bank to pay Soy on receipt of invoices. This is
A) a formal contract.
B) an informal contract.
C) an implied contract.
D) a quasi contract.
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Chapter 8: Agreement in Traditional and E-Contracts
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Sample Questions
Q1) A statement of future intent-"I plan to sell my car"-is an offer.
A)True
B)False
Q2) Under federal law, an e-document is not as enforceable as a paper one.
A)True
B)False
Q3) Pastries, Inc., sends its catalogue to Rollo and includes a "personalized" letter inviting the purchase of any item at the advertised price. This is
A) an offer because of the "personalized" letter.
B) an offer because there is no room for price negotiation.
C) an offer only if Rollo previously bought items from Pastries.
D) not an offer.
Q4) An essential element for contract formation is agreement.
A)True
B)False
Q5) An invitation to negotiate-"can you afford this?"-is an offer.
A)True
B)False
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Chapter 9: Consideration, Capacity, and Legality
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Sample Questions
Q1) A contract between Kim and Larry to lease residential property contains an exculpatory clause. This clause is
A) enforceable as a matter of public policy.
B) enforceable if either party is in a business important to the public.
C) enforceable if an event occurs to which the clause applies.
D) generally unenforceable.
Q2) Twyla's dock is damaged in a boating accident caused by Ulrich's negligence. Twyla agrees not to sue him if he will pay for the damage. If Ulrich fails to pay, Twyla can bring an action for breach of contract. This is
A) a covenant not to sue.
B) an illusory promise.
C) an unforeseen difficulty.
D) a release.
Q3) Even in states that permit certain types of gambling, courts find that gambling contracts are illegal.
A)True
B)False
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11
Chapter 10: Defenses to Contract Enforceability
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Sample Questions
Q1) A unilateral mistake always gives the mistaken party a right to relief from the contract.
A)True
B)False
Q2) Ralph enters into a contract with Skye to buy her land based on her assertion that the land is open to development. After the sale, Ralph learns that only a small section of the land can be built on-a local law prohibits construction on the rest of the property. Ralph can
A) not avoid the contract because persons are assumed to know the law.
B) avoid the contract due to a mutual mistake.
C) avoid the contract due to a mistake in value.
D) avoid the contract due to fraud.
Q3) To be enforceable, a memorandum evidencing an oral contract must include the essential terms.
A)True
B)False
Q4) Scienter clearly exists if a party knows a fact is not as stated.
A)True
B)False
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Chapter 11: Third Party Rights and Discharge
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Sample Questions
Q1) Lestor and MaryElise enter into a contract. Lestor agrees to mow MaryElise's yard every week for the summer. MaryElise is
A) the obligor.
B) the obligee.
C) the assignee.
D) the assignor.
Q2) Market Company and Nick enter into a contract for Nick to cut and trim the landscaping around Market's building before a meeting of the company's sales staff. When Nick's schedule conflicts, his transfer of the duties of cutting and trimming to Otis is A) a delegation.
B) an assignment.
C) a third party beneficiary contract.
D) prohibited.
Q3) Privity of contract establishes the basic concept that third parties have no rights in contracts to which they are not parties.
A)True
B)False
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Chapter 12: Breach of Contract and Remedies
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Sample Questions
Q1) Ida orally agrees to pay Jim to seed and harvest a quarter of Ida's farm acreage for four hay seasons. After Jim prepares the land and plants the first crop, Ida says that their deal is off. Jim can most likely recover on a theory of A) reformation.
B) restitution.
C) liquidated damages.
D) quasi contract.
Q2) Ready Repair Service enters into a contract to fix washers and dryers in Scrub n' Dry Company's coin-operated laundries. If Ready Repair breaches the contract, Scrub n' Dry can
A) do nothing but make a deal with a different service provider.
B) do nothing but temporarily suspend operations and wait.
C) file a criminal complaint against Ready Repair.
D) sue Ready Repair for damages.
Q3) In most situations, when a breach of contract occurs, the innocent injured party is held to a duty to mitigate the damages.
A)True
B)False
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Chapter 13: Intellectual Property Rights
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Sample Questions
Q1) Hua plots a new Iron Man adventure and carefully and skillfully imitates the art of Marvel Comics to create an authentic-looking Iron Man graphic novel. Hua is not affiliated with the owners of the copyright to Iron Man. Can Hua publish the novel as his own work without infringing on the owners' copyright?
Q2) Sweetleaf Company bottles and sells maple syrup from its plant in Vermont. On the labels is a logo that states "100% Genuine New England Maple Syrup Certified by the Northeast Maple Syrup Harvesters Association." This logo is
A) a certification mark.
B) none of the choices.
C) a service mark.
D) trade dress.
Q3) In his recording "Nothing Nu 4U," O'Reilly uses the melody of a song written by Pete. O'Reilly did not obtain Pete's permission. This is
A) copyright infringement.
B) patent infringement.
C) trademark infringement.
D) none of the choices.
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Chapter 14: Internet Law, Social Media, and Privacy
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Sample Questions
Q1) The law restricts the "fair use" of methods for bypassing encryption software for noncommercial purposes.
A)True
B)False
Q2) Riley obtains permission from Saga Company to use the firm's game app on Riley's smartphone, tablet, and other mobile device. But Riley does not obtain ownership rights in the app. This is
A) a license.
B) a cookie.
C) cloud computing.
D) a violation of the law.
Q3) Eddie and other users of Facebook and other social networking sites post trademarked images and copyrighted materials on these sites without permission. This is
A) a violation of the intellectual property rights of the owners of the images and materials.
B) within the rights of the users of social networks.
C) a subject for dispute resolution by the providers of the social networks.
D) a "business-extension exception" under the Electronic Communications Privacy Act.
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Page 16
Chapter 15: The Formation of Sales and Lease Contracts
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Sample Questions
Q1) Under the UCC, prompt shipment of goods is considered an acceptance of an offer to buy the goods.
A)True
B)False
Q2) Car n' Truck Body & Paint Company orders custom paint from Diverse Hues Inc., but Diverse does not deliver. Car n' Truck will probably be unable to enforce the agreement if the parties omitted
A) a price term.
B) a delivery date.
C) a quantity term.
D) shipping arrangements.
Q3) The terms of a fully integrated contract can be contradicted by evidence of any prior agreements.
A)True
B)False
Q4) A merchant's firm offer is revocable at any time before acceptance.
A)True
B)False
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Chapter 16: Performance, Breach, and Warranties of Sales and Lease Contracts
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Sample Questions
Q1) Trucks & Trailers, Inc. (T&T), and United Express Service enter into a contract for a lease of vehicles. T&T is a merchant who deals in goods of the kind leased. Under the UCC, an implied warranty of merchantability arises
A) automatically in most contracts for a lease of goods.
B) only if the lessee asks for it.
C) only if the lessor expresses such a warranty.
D) only in conjunction with sales, not lease, contracts.
Q2) Under the UCC, a seller's tender of goods that do not conform in every way to a contract is still a valid tender.
A)True
B)False
Q3) HandiTools, Inc., sells power tools, power tool parts, and related supplies under "full" warranties. Under the Magnuson-Moss Warranty Act, this means that HandiTools must provide
A) free repair or replacement of any defective part.
B) a toll-free number for a HandiTools-approved service company.
C) a complete catalog of products and parts available for sale.
D) repair or replacement of any defective part at a reduced charge.
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Chapter 17: Agency Relationships in Business
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Sample Questions
Q1) A principal is not normally liable for the tort of an agent committed within the scope of the agency or employment.
A)True
B)False
Q2) Refer to Fact Pattern 17-1. With respect to third parties, Nadine is Pumps's
A) employee, agent, and independent contractor.
B) employee and agent.
C) employee but not agent.
D) independent contractor.
Q3) A disclosed principal is liable to a third party for a contract made by the agent acting within the scope of his or her authority.
A)True
B)False
Q4) Under the law of agency, notice to the agent is notice to the principal.
A)True
B)False
Q5) Employment laws apply to the employer-independent contractor relationship.
A)True
B)False
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Chapter 18: Small Businesses and Limited Liability Companies
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Sample Questions
Q1) Bee Hive Honey, LLC's members include Charlie and Donna. For purposes of suing and being sued, Bee Hive Honey is
A) an aggregate of its members.
B) a non-entity
C) a legal entity apart from its members.
D) a non-participating third party.
Q2) Jim is considering forms of business organization, including the limited liability company (LLC), for his business-Kettle Popt-Korn. Most states require that an LLC have A) a corporate veil, but no minimum number of participants.
B) at least one member.
C) at least two members.
D) at least one non-member manager.
Q3) A partner may pursue his or her own interests without automatically violating the partner's fiduciary duties to the partnership and the other partners.
A)True
B)False
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Chapter 19: Corporations
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Sample Questions
Q1) For shareholders to act during a shareholders' meeting, a quorum must be present.
A)True
B)False
Q2) With preemptive rights, shareholders can preempt the decisions of directors and officers with respect to corporate policy.
A)True
B)False
Q3) Ann is a corporate officer for Blooming Flora, Inc. As a corporate officer, Ann is
A) the head of the board of directors.
B) an employee of the firm.
C) the employer of the firm.
D) in charge of approving the shareholders.
Q4) Cumulative voting refers to the accumulation of proposals presented annually for a shareholders' vote.
A)True
B)False
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