Business Legal Environment Test 1

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Monroe is reviewing an appellate case for class and must correctly identify the parties to the case. The party appealing the case is known as the
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appellant
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Richard is a state appeals court judge. In making judicial decisions, Richard issues rulings that are consistent with precedents established in similar cases within his jurisdiction. Richard is following the principle of
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Stare Decisis
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Most appellate court judges write opinions in which they give the reasons for their decisions. These opinions are collected and published in volumes of books known as
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Reporters
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Sarah prevails in her lawsuit against Carl for injuries she sustained in a car accident. As a result, Sarah is entitled to a remedy. In the U.S. legal system, Sarah’s remedy will most likely be in the form of
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Damages
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The most important primary source of our law is
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The U.S. Constitution
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State Constitutions are a primary source of law. (T,F)
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True
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Any law based on a constitution is called…
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constitutional law
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The U.S. constitution is…
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supreme
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Hector believes that a law under which he was convicted for a crime violates the Constitution. If ultimately the Supreme Court agrees with him, that law will be declared
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unconstitutional
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A second primary source of law involves the U.S. ______ and state and local ________.
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Congress, Legislatures
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The U.S. Congress passes federal statutes. They do not apply to all states. (T,F)
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False
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The ____________ is a uniform law adopted by all states that facilitates commerce.
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Uniform Commercial Code
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Administrative Agencies are created to:
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perform specific government functions.
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The federal trade commission is an example of a…
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independent regulatory agency
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Case law is based on the decision made by those who run administrative agencies. (T,F)
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False
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Case law is derived from judges’ decisions for actual cases. (T,F)
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True
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The rules, orders, and decisions of federal state, or local government administrative agencies.
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Administrative Law
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Laws (statutes and ordinances) enacted by federal, state, and local legislatures.
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Statutory Law
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The laws expressed in the U.S. Constitution and state constitutions.
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Constitutional law
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Judge-made law.
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Case Law
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The doctrine of Judicial Review allows
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the judicial branch to decide whether laws or actions of the other two branches are constitutional
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The power of judicial review has remained unchallenged since which supreme court decision?
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Marbury v. Madison
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When a state exercises jurisdiction over property within that state, this type of jurisdiction is called in personam. (T,F)
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False
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A long arm statute allows one state’s court to exercise jurisdiction over a defendant from another state who has
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minimum contacts
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What type of jurisdiction is for cases involving federal questions and diversity-of-citizenship cases.
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Concurrent Jurisdiction
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What type of jurisdiction is for cases involving all matters not subject to federal jurisdiction
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Exclusive state jurisdiction
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What type of jurisdiction is for cases involving federal crimes, bankruptcy, patents, copyrights, trademarks, and suits against the united states.
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Exclusive Federal Jurisdiction
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Venue refers to the primary subject matter of a case at trial. (T,F)
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False
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What are the three elements of standing to sue:
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Causation, Remedy, and Harm
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Jurisdiction that exists with courts that have the authority to hear a case for the first time, called trial courts.
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original
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Jurisdiction that Limits the court’s jurisdictional authority to particular types of cases and can be either limited or general jurisdiction
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Subject Matter
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Jurisdiction that exists with courts of appeal and review
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Appellate
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A federal court can exercise jurisdiction if a case involves:
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A treaty, the U.S. constitution, or a federal law
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The Johnsons are in an auto accident with a driver who lives near them in the same town. No one is injured and the johnsons’ car suffered only $5000 in damages. Why can’t the johhsons sue the other driver in federal court?
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because the johnsons live in the same state and the damages are too small.
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what is the ordering of most court systems? State and Federal.
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Trial courts –> Intermediate Appellate courts –> Supreme Courts
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Courts that often deal with questions of fact
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Trial Courts
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Courts that deal with questions of law
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Appellate or Reviewing courts
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The Supreme Court Hears all cases sent to it for review. (T,F)
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False
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Which of the following does the supreme court have to issue before it hears a case?
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A writ of certiorari
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What are the components of the federal court system?
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United States Supreme Court, U.S. District Courts, Court of International Trade
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John is a resident of Iowa. While driving through California, he has an accident involving Marisol, a California resident. Marisol files a lawsuit in a California state court. Over John, the california court has…
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in personam jurisdiction
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Stan, a citizen of Iowa, files a lawsuit in an Iowa state trial court against Jalisco Farm Supply, a Texas company that sells supplies in Iowa. The court has original jurisdiction because
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the case is being heard for the first time
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Toybox, Inc., manufactures the Spintop, a toy that the company discovers can cause harm. Before anyone is injured, Anne, a pediatric nurse who has not purchased a Spintop, files a suit against Toybox, Inc. In seeking to have the suit dismissed, Toybox, Inc., best argument is that Anne does not have
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standing to sue
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A trial between Shane and Verna results in a jury verdict in Shane’s favor. After the jury renders its verdict, Verna’s attorney can file a motion
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for a new trial
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Anna sues Whitney. While presenting her case, Anna’s attorney calls Whitney’s doctor to the witness stand. The questioning of this witness at this point in the trial is known as
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direct examination
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Vinny decides to sue Allison. To begin the suit, Vinny must file a complaint. A complaint should contain
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a statement of the basis for the court’s jurisdiction
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Motor Sports, Inc., sues A-Z Speed. Motor Sports alleges that A-Z breached (failed to perform) a contract that required A-Z to sell ten Jet Skis to Motor Sports. Under the rules governing discovery, Motor Sports is most likely entitled to obtain
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documents in A-A’s possession relating to the contract.
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Transpac Corp. and Alliance, Inc., agree to a contract that includes an arbitration clause. After a dispute arises, the case goes to arbitration. The arbitrator finds in Transpac’s favor. Alliance files a lawsuit, alleging that the award should not be enforced because the arbitrator made an error in her findings of fact. The court will likely
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Do nothing
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Marshall is working on a contract with a U.S. company involving the manufacturing of goods in China, and wants to ensure that U.S. law applies in the event of a dispute. He should include which of the following clauses in the contract.
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Choice of Law Clause
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Litigation
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The process of resolving a dispute through the court system
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Alternative Dispute Resolution (ADR)
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The resolution of disputes in ways other than those involved in the traditional judicial process. Negotiation, mediation, and arbitration are forms of ADR.
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Negotiation
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In regard to dispute settlement, a process in which parties attempt to settle their dispute without going to court, with or without attorneys to represent them.
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Early neutral case evaluation
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A form of alternative dispute resolution in which a neutral third party evaluates the strengths and weakness of the disputing parties’ positions. The evaluator’s opinion forms the basis for negotiating a settlement.
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Mediation
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A method of settling disputes outside of court by using the services of a neutral third party, called a mediator. The mediator acts as a communicating agent between the parties and suggests ways in which the parties can resolve their dispute.
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Facilitation
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Settling Disputes in which a third party assists disputing parties in reconciling their differences
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Mini-Trial
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A private proceeding in which each party to a dispute argues its possition before the other side and vice versa. A neutral third party may be present and act as an adviser if the parties fail to reach an agreement.
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What is the simplest form of ADR?
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Negotiation
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Which of the following is not a form of assisted negotiation? Mini-Trial, Early neutral case evaluation, Facilitation, Jury Trial, Summary Jury Trial
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Jury Trial
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Arbitration differs from other forms of ADR Because:
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the arbitrator hears the dispute and imposes a solution on the parties.
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Parties meet informally with or without their attorneys and attempt to agree on a resolution
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Negotiation
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A neutral third party meets with the parties and emphasizes points of agreement to bring them toward resolution of their dispute.
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Mediation
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The parties present their arguments and evidence before an arbitrator at a hearing and the arbitrator renders a decision resolving the parties’ dispute.
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Arbitration
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Submission (in arbitration)
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The act of referring a dispute to an arbitrator
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Award (in arbitration)
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The arbitrator’s final decision
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The federal Arbitration Act established a set arbitration procedure. (T,F)
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False
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What is a major non profit provider of ADR services
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the AAA
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What involves a court deciding whether a matter is one that must be resolved through arbitration?
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Arbitrability
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What reasons can an arbitrators decision be set aside by a reviewing court?
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Abuse of power in the arbitration process Misconduct by the arbitrator Fraud or corruption by the arbitrator
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James, a homeowner, files a lawsuit against Helen, his construction contractor. Prior to trial, they meet with their attorneys to try to resolve their dispute before going to trial. This procedure is known as
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Negotiation
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Most states have adopted what act
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The Uniform Arbitration Act
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The arbitration process begins with the hearing. (T,F)
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False
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When one party files a lawsuit to compel arbitration, the courts must resolve the issue of arbitrability.
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True
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The united states supreme court has held that mandatory arbitration clauses in employment contracts are generally undenforcable.
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False
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corruption, fraud, or other
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exhibited bias
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despite sufficient, evidence pertinent, substantially prejudices
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a mutual, final, and definite
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Andrew submitted a business dispute with Rebecca to arbitration pursuant to the terms of the parties’ contract. Rebecca did not object and participated in the arbitration, but lost. She objected to the submission of the case to arbitration. Her objection will be denied because of the application of the legal principle of
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waiver
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What is the mechanism by which the parties to a contract can make sure that the law of a particular state governs their arbitration agreement? a. They can ask a federal judge to tell them which state is most appropriate. b. They can include in their agreement a choice of law clause. c. They may decide that the president of one firm chose which state law to govern their arbitration agreement.
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B
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One of the following is NOT a disadvantage of arbitration: a. The result in any particular dispute can be unpredictable. b. Arbitrators do not have to issue written opinions or facilitate a participant’s appeal to a court. c. Arbitrators must decide disputes according to whatever rules have been provided by the parties even if they are unfair. d. Arbitration is costless.
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D
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Jeff believes in the principle of rights theory and uses it to make ethical decisions for his business. He must decide whether to expand his business into Asia. Several key employees do not want the business to expand overseas and have threatened to quit if Jeff makes this move. Under the principle of rights theory, he will make this decision by considering
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how the expansion will affect the rights of his employees, his consumers, and the community into which he wishes to expand.
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Marshall owns and operates a construction firm. He uses inexpensive and low-grade building products and accepts inferior carpentry work from his subcontractors. Nevertheless, Marshall complies with all the city building codes as well as all state and federal laws. Has he fulfilled all of his ethical obligations?
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No, because legal compliance is regarded as the moral minimum.
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Patrick, the human resources manager at Acme Company, must decide how to cut personnel costs. This decision will harm employees who are laid off or fired. Patrick must balance the interests of employees who have been loyal to the firm for a long time against the interests of
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Acme’s shareholders.
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Bribery is acceptable in certain foreign countries. Indeed, U.S. Development, Inc., has found that the only way it can ensure delivery on certain contracts in these countries is to bribe the officials. This is
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permitted by U.S. law if the payment is made to a minor official to speed up administrative procedures
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Under corporate social responsibility theory, to who(m) does the chairman and CEO of the company owe an ethical duty? a. The shareholders of the company only. b. The workers and the shareholders only. c. The workers, the community and the shareholders. d. Nobody, as the chairman and CEO, he should only do what he feels is right.
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C
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When the CEO of the company decides that he wants to pay the workers while the plant is closed, because “it is the right thing to do” regardless of the consequences, what ethical philosophy is he likely using? a. duty-based ethics b. outcome-based ethics c. utilitarian ethics d. Business Process Pragmatism
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A
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Which of the following would be the best argument to the shareholders that paying the workers while the plant is under construction is the correct decision? a. That not paying them is illegal, and therefore it does not meet the standards of a moral minimum. b. That short-term profit maximization would be benefitted by this move. c. That long-term profit maximization would be benefitted by this move. d. That the triple bottom line would be hurt by this move.
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C
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Ethics can be defined as the study of…
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What constitutes right and wrong behavior
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Business ethics does NOT focus on: a. How businesses are treated under international law. b. The decisions businesses must make and whether they are right or wrong. c. How businesspersons apply moral and ethical principles in making their decisions.
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A
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What are the three aspects of the triple bottom line?
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Corporate Profits, impact of profits on people, impact of profits on the planet
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What four things should businesses evaluate when making a decision?
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The legal implications of each decision The PR impact The safety risks for consumers and employees The financial implications
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Business ethics are consistent only with short-run profit maximization. (T,F)
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False
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Compliance with the law is sometimes called the..
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moral minimum
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You are starting a new company. You want your employees to act ethically. What will you NOT do?
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Let employees know that only short-run profits matter.
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Olivia makes a statement on her Twitter account that casts a negative light on her employer. Her manager fires her for violating her company’s social media policy. Olivia claims that federal law prohibits her from being fired. Does she have a valid argument?
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Yes, because federal labor law protects employees’ right to engage in “concerted activities”

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