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Chapters 1 Through 9

LAW & ETHICS IN THE BUSINESS ENVIRONMENT

CHAPTER 1

Law, Ethics, Business: An Introduction

Questions

1. Select the best definition of ethics:

a set of rules for behavior.

a menu of options regarding what we must do.

a menu of options regarding what we should do.

standards that must be met to avoid penalty.

2. Laws must be static and unyielding in order to provide stability for a society.

a. True

b. False

3. Choose the statement regarding duty to rescue that is false:

There is no general duty to rescue an individual.

Individual freedom of dictates that a person should not be forced to act.

Under a liberal–communitarian approach, citizens owe a duty to the state to rescue other citizens.

When one taunts another person who then puts themselves in danger in response to the teasing, the teaser has a duty to rescue the person teased.

4. All of the following are considered exceptions to the general rule that there is no duty to rescue except:

a. Pre-existing duty: For example, lifeguards have signed contracts agreeing to rescue people in exchange for pay and benefits.

b. Witnessing an accident: This creates a duty to step in and help the injured.

c. Employer: A duty exists to help an employee injured while working for that employer.

d. Endangerment: If one puts another in danger, they are obligated to rescue the person put in danger.

5. Which of the following views would be consistent with the free market ethics approach advocated by Milton Friedman?

Outsourcing to other countries is wrong because it is detrimental to the overall US economy.

When making decisions, corporate managers should consider the interests of all the corporation’s stakeholders.

The only social responsibility of business is to increase profits in a legal and ethical manner.

Automating processes and replacing workers is unethical since it does not serve a greater good.

6. Which of the following statements best illustrates the view of “utilitarianism”?

I. From each according to his abilities, to each according to his needs.

II. The risk reasonably to be perceived defines the duty to be obeyed and risks imports relation; it is risk to another or to others within the range of apprehension.

III. An action is right when maximizing welfare and total well-being.

IV. Individuals should pursue his or her own self-interest, even at the expense of others.

I only

III only

I and II

I, II, and III

7. According to deontological thinker Kant:

I. It is only acceptable to lie when done to protect an innocent person.

II. The level of respect owed to another is based on one’s relationship to that person.

III. It is wrong to use another person unless mutual benefit is attached.

IV. Once chosen, actions will be repeated whenever the same situation arises.

a. I and III

b. II and IV

c. III and IV

d. I, III, and IV

8. Virtue ethics:

a. focuses on what human beings are capable of being.

b. develop from learning how to make choices in difficult situations.

c. accepts that individuals rarely reach moral excellence.

d. are based on the concept that a person’s ethical beliefs are developed in childhood and do not change.

9. The Ethic of Care is:

a. A set of rules that explain how to prioritize those people affected by a decision so that a utilitarian analysis can be done successfully.

b. A set of universal principles, which applied evenly to all decisions will result in fairness and equity in ethical decisions.

c. The idea that we should all make decisions under the assumption that we don’t know our station in life, that we could be the person most negatively impacted by the decision.

d. A set of principles that encourage decision makers to look at human relationships as a primary motivator for a decision.

10. Assuming a business ethical dilemma, which statement best illustrates Gilligan approach suggested in her theory of “The Ethics of Care”?

individual rights and justice for all

applies only to women and not men

care and responsibility to others

obedience to independent moral rules or duties

11. Which of the following statements is INCORRECT regarding the rights of shareholders?

I. voting power on major issues and ownership in a portion of the company

II. right to transfer ownership and dividend entitlement

III. hire and fire management and select and appoint a chief executive

I and II

I, II, and III

I only

III only

12. According to Citizens United v. Federal Election Commission, which of the following is not a reason to allow corporations the right to spend money and advertise for political candidates?

a. Political speech is the most important, and most protected, speech that exists. It is crucial to the democratic process that political speech be encouraged and heard.

b. The immense wealth of a corporation allows it to be the most accurate in providing messages to people.

c. Independent expenditure by corporations do not give rise to corruption or the appearance of corruption.

d. Rapid changes in technology suggest laws restricting political speech should not be upheld.

13. Corporate director or officer decisions to dedicate corporate funds for social causes is called:

a. Corporate Social Responsibility (CSR)

b. Social Activism (SA)

c. Business Engagement in Environmental Situations (BEES)

d. Strategic Investment in Stakeholder Issues (SISI)

14. Which of the following statements regarding Benefit Corporations is true?

a. Benefit corporations are required to identify one or more specific benefit purposes.

b. Directors of benefit corporations are protected from all lawsuits from both shareholders and beneficiaries of the corporation’s public benefit purpose.

c. Benefit corporations are incorporated under state law with the intent to be profitable.

d. All of these statements regarding benefit corporations are true.

Essay Questions

15. Describe the difference between the law and ethics.

16. From where do ethical preferences originate?

17. Discuss how multinational corporations can be both a benefit and a detriment to society.

18. Explain why laws exist that do not impose a duty to rescue.

19. Describe the philosophy of noted economist, Milton Friedman, on the issue of “free market ethics.”

20. Discuss the differences in utilitarianism and virtue ethics in making a decision.

21. Discuss the similarities and differences between a traditional corporation and a benefit corporation.

CHAPTER 2

The Duty of Loyalty: Whistleblowing

Questions

22. Select the best definition of whistleblower:

the sole goal of modern ethics training

originated from the Latin "qui tam pro domino regequam pro sic ipso in hoc parte sequitur" meaning "who as well for the king as for himself sues in this matter."

a narrow exception under the general rule of at-will employment

people who report unethical or illegal activities under the control of their employers

23. Under the legal doctrine of “employment at will” an employee can be lawfully terminated from her job for:

V. wearing a shirt that clashes with her suit

VI. any non-discriminatory reason

VII. complaining about illegal activity in the workplace

VIII. only for good cause

a. I only

b. II only

c. I and II

d. III and IV

24. Exceptions to the rule of employment-at-will include which of the following?

I. organization of unions

II. passage of Sarbanes Oxley Act

III. raising of public policy issues

IV. promise of implied-contract or covenant-of-good-faith

I only

II only

I and II

I, II, III, IV

25. The Food Safety Modernization Act:

I. offers some protections for whistleblowers

II. covers vegetables, seafood and dairy

III. covers eggs and poultry

IV. gives the FDA power to make mandatory recalls

I and II only

I, III and IV only

I, II and IV only

I, II, III, IV

26. Ag Gag would criminalize:

undercover video recordings showing animal cruelty

recordings of public health violations occurring in agricultural facilities

Both a. and b.

Neither a. nor b.

27. The National Labor Relations Board has stated that the right to discuss working conditions freely and without fear of retaliation should exist at the work site. However, the Board believes the same right does not exist online.

True

False

28. The Constitution does not always protect free-speech rights for what public employees say on the job. Which of the following is true?

When a citizen enters government service, the citizen need not accept certain limitations on his or her freedom.

Public employees may speak out on matters of public concern and have First Amendment protection but not when they speak out in the course of their official duties.

As public employees speak out and receive First Amendment protection, there is an acceptable chilling of the speech of all potential whistleblowers.

None of the above

a. The employer must have a justification for treating the employee differently than it would treat a member of the general public.

b. The speech cannot be about political topics.

c. The speech must be about something of great public concern.

d. The speech cannot be made as part of the employment (such as an internal memorandum).

30. When Qui Tam whistleblowers against the pharmaceutical industry were questioned about their motivation, several reasons were mentioned. Which of the following was NOT given as a reason?

a. Potential risk to public health.

b. Unfair employment practices.

c. Financial reward.

d. Self-preservation.

Essay Questions

31. According to research, what are the characteristics of the typical whistleblower?

32. According to the Montana Wrongful Discharge from Employment Act, what are the three elements of a wrongful discharge?

33. How was Ken Kendrick of The Peanut Corporation of America a typical whistleblower? An atypical whistleblower?

34. Explain what happened in the 1968 Supreme Court’s re-interpretation of the First Amendment to the U.S. Constitution regarding public employees’ limited speech protections.

35. Describe at least two other times since the Pickering decision in which the Supreme Court revisited the ruling. What were the outcomes?

36. As discussed in the text, False Claims Act or qui tam suits have been successful in the health care industry. The text mentions several things that all these successful claims have in common. Discuss those things.

CHAPTER 3

Privacy and Technology

Questions

In considering the legality of employer interception of employee e-mails at work, pick the correct statement.

IX. Employees have complete expectation of privacy since they can select their password for in-house and remote access of e-mails.

X. A subpoena is required by the employer to read any e-mail that is clearly marked “confidential” by the employee.

XI. No expectation of privacy exists over an employer-owned computer system at work.

XII. Statement by the employer that e-mails are confidential and privileged cannot be later used by an employer to defeat an employee’s claim of privacy

a. I only

b. II only

c. III only

d. I and IV

It is perfectly legal for employers to secretly and intrusively spy on their employees.

a. True

b. False

Which of the following are ways businesses justify electronic surveillance of employees?

I. It measures and encourages efficiency.

II. It uncovers employee disloyalty.

III. It enhances the fairness of personnel evaluations.

IV. It prevents employees from sending personal emails on company time.

a. I and II only

b. I, II and III only

c. I, II and IV only

d. I, II, III and IV

The Electronic Communications Privacy Act of 1986 (ECPA):

i. supplements the Omnibus Federal Employee Workplace Privacy Rights Law of 2008.

j. has been an effective law because employee privacy intrusions are less common and steadily declining since 2000.

k. restricts employer access to public chat room interactions.

l. fails to protect employees in most situations involving e-mail monitoring by public and private employers.

According to the article excerpted in the text entitled, The Functions of Privacy,by Alan Westin, privacyhas several functions in today’s society. These include:

a. Total freedom in the private life with no consequences to the work life.

b. The ability to vent anger at authority without being held responsible.

c. The ability to post critical information on the Internet without consequences at work.

d. The ability to spend time quietly analyzing the actions and reactions of other people.

It is illegal to increase a specific employee’s health insurance premiums based on the employee’s lifestyle.

a. True

b. False

A majority of states have enacted off-the-job privacy protection laws. What is the LEAST effective argument by an employer to regulate off-the-clock activities in a state that has not enacted such lifestyle rights legislation?

a. It will provide a healthy work force.

b. Unregulated employees are less productive.

c. There is no invasion of privacy since the employee is “at will.”

d. It will prevent higher health care and insurance costs.

According to the article, Can They Do That? By Lew Maltby:

a. A job candidate who has been arrested will probably not be disqualified unless the candidate was found guilty.

b. Psychological tests are a good way to determine a job candidate’s honesty.

c. Employees who are being treated unfairly can protect themselves by joining a union.

d. Credit score can keep you from getting a job, even if it doesn’t involve handling money.

The government cannot interfere with the choices adults make about their private family and sexual life.

An individual’s medical history cannot be publicized by the government.

Individuals are protected against unwarranted invasion of privacy by private corporations.

Corporations are protected against unreasonable government searches or seizures.

a. when a corporation has authorized an agent with direct authority to perform an electronic search of an employee’s e-mail account.

b. upon issuance of a subpoena duces tecum to bring electronic data (e-mails, files, etc.) including electronic metadata such as headers, directional information, and other such useful tracking data.

c. when the government is conducting a search.

d. during an archival search of e-mails on a corporation’s server.

When it comes to employment and social media:

I. Every U.S. law dealing with employee privacy grants significant deference to an employer’s legitimate business interest.

II. U.S employers may legally canvass social media sites for information on employees and potential employees and act upon the information found.

III. When an employer finds and uses social media information to reprimand or fire an employee, the employer is obligated to disclose the method of gaining that information to the employee.

IV. Statutes that specially govern the intersection of social media and workplace privacy were enacted in 2013.

a. I and II only

b. I, II and III only.

c. I, II and IV only

d. I, II, III and IV

The 2004 Heath Information and Portability and Accountability Act (HIPPA):

a. requires consent for medical information to be accessed and shared.

b. prohibits discriminatory use of pre-employment medical tests.

c. prohibits employers from requesting genetic information as part of a post-offer medical exam.

d. All of these statements are true.

True

False

Essay Questions

Discuss the employee claims that counter businesses’ justification of electronic surveillance.

Name the two main factors that most courts use in determining whether or not electronic monitoring of employees is an invasion of privacy.

Briefly describe what Alan Westin believes are the “functions of privacy.”

Discuss Lewis Maltby’s proposition that employers should not do drug testing (or other testing related to off-work conduct) but should instead focus on impairment testing when an employee is entering the workplace.

The term “privacy” does not appear anywhere in the Constitution of the United States. Discuss (meaning share your opinion and support it with anecdotes or evidence) whether or not the Supreme Court was correct in “finding” privacy in the Constitution.

19. Discuss the privacy expectations of millennial employees.

20. Under the Genetic Information Nondiscrimination Act of 2008 (GINA) it is unlawful for an employer to request, require or purchase genetic information related to employees of their families. List at least three exceptions to this rule.

CHAPTER 4

Valuing Diversity: Stereotyping v. Inclusion

Questions

1. Equal protection is the constitutional guarantee:

that empowers Congress to regulate equally distributed commerce with foreign Nations, and among the several States, and with the Indian Tribes.

that laws made in pursuance of the Constitution and all treaties made under the authority of the United States shall be the equally protected as the “supreme law of the land.”

embodied in the Fourteenth Amendment to the U.S. Constitution.

that grants and distributes power and responsibilities to national and state governments.

2. A mayor serving in a major metropolitan area receives an internal memorandum indicating personnel at many police stations are single-race. At the time of the report, thirty percent of the police force was black or Hispanic. She immediately calls a press conference and orders transfers of police officers to achieve racial balance across the city. The transferred police officers sue on constitutional grounds. Assuming just these facts, what is the strongest argument that might be advanced by the transferred officers based on constitutional grounds?

Executive action by the mayor is unconstitutional because there was no rational relationship to a valid governmental purpose.

The action is “void for vagueness” since transferred police officers must unnecessarily guess at the underlying public policy of the transfer process.

The mayor’s policy used race as the basis for transfers, and assignments are subject to strict scrutiny.

The transfer can be set aside based on intermediate or heightened level of scrutiny.

3. Title VII specifically addresses the issues of affirmative action, sexual harassment, and same-sex marriage.

True

False

4. Which of the following federal government agencies is charged with enforcing Title VII of the Civil Rights Act of 1964?

U.S. Department of Labor

Merit Systems Protection Board

Office of Personnel Management

Equal Employment Opportunity Commission

5. To establish a prima facie case of religious discrimination, the employee has to show all of the following except which one:

a. That religion has been a significant part of the employee’s life for a significant amount of time.

b. That the employee has a sincerely held religious belief.

c. That the employer was on notice that the religious belief was in conflict with the employer’s request.

d. That there was a negative employment action based on a conflict between the religious belief and the employment requirement.

6. The Equal Employment Opportunity Commission (EEOC) favors English-only rules because they decrease the ability for people to stereotype based on national origin or ethnicity and thus decrease illegal workplace discrimination.

a. True

b. False

7. Employment practices without business justification applied to all employees that result in a less favorable effect for one group than for another group may state a claim for:

disparate treatment

disparate impact

inclusion

reasonable accommodation

8. John Smith was assaulted on the loading dock by a coworker, Jim Jones, at the Acme Widget Company. The attack was unprovoked by Smith. After the physical assault, there was an angry verbal exchange between the parties. The incident ended when Jones yelled that Smith was a “sissy” and “everybody knows you're queer as a three dollar bill." Which of the following statements best describes the outcome of the harassment lawsuit filed by Smith under The Civil Right Act of 1964?

XIII. Sex discrimination is prohibited by federal law (The Civil Right Act of 1964).

XIV. Sexual orientation discrimination is prohibited by federal law (The Civil Right Act of 1964).

XV. Suits based on harassment due to sexual orientation cannot prevail when based on local or state laws.

XVI. Sexual orientation discrimination is not prohibited by federal law (Title VII).

I only

II only

III only

I and IV

9. Federal courts have consistently held that the Civil Rights Act’s ban on ‘discrimination on the basis of sex’ does not include discrimination based on one’s sexual orientation or affiliation.

a. True

b. False

10. All of the following are true statements regarding the Family and Medical Leave Act (FMLA, 29 U.S.C. §§ 2601, et seq.), EXCEPT which of the following?

An eligible employee is entitled to take 12 weeks of unpaid leave in any 12-month period.

Every personal or family emergency qualifies for FMLA leave.

Under most circumstances, the employer must reinstate employees when they return from leave.

An eligible employee is entitled to take paid leave because of the birth of a son or daughter.

11. In order to be covered by the ADA (Americans with Disabilities Act), a disability must be ongoing and permanent for the foreseeable future.

a. True

b. False

Essay Questions

12. Describe the term heightened scrutiny. What do the courts use to determine which type of scrutiny to use?

13. What is the EEOC guideline on English-only workplace rules? What are two reasons given for the rules?

14. What must a plaintiff show to make a prima facie case of hostile environment sexual harassment?

15. According to sociologists, what is society’s image of a good mother? A good father? How do those images impact how parents who chose to balance their work life with family (i.e. work part time) are viewed?

CHAPTER 5

Workers Rights as Human Rights: Health and Safety in the Global Workplace

Questions

16. The Fair Labor Standards Act (FLSA) of 1938:

I. sets maximum hours

II. requires minimum wages

III. requires compliance with child labor standards

IV. covers farmer workers

a. I. and II only

b. III and IV only

c. I, II and III only

d. I, II, III and IV

17. With the adoption of the ____________, the U.S. began to address the need to prevent, or minimize, workplace accidents and health hazards.

Securities Act

Occupational Safety and Health Act

Environmental Protection Agency

National Insurance Act

18. OSHA has a wide range of tools available to address the risks that workers face.

a. True

b. False

19. Typically individual stockholders are not held responsible for the actions of a corporation. Exceptions usually relate to comingling of funds, underinsuring, or similar actions by the corporate leadership. This is called:

a. risking liability

b. piercing the corporate veil

c. the privilege of the stockholders

d. free market trading of stocks

20. Almost all of the hazards that workers face are known and visible.

True

False

21. The ADA direct threat provision permits an employer to impose a:

a. “requirement that an individual shall not pose a direct threat to the health or safety of other individuals in the workplace.”

b. “requirement that an individual shall not pose a direct threat to the health or safety of themselves in the workplace.”

c. Both a. and b.

d. Neither a. nor b.

22. According to Henry Shue, firms are not in the business of protecting the interests of their workers, except when this is a means to accomplish the organizational objectives.

a. True

b. False

23. When an employee files a worker’s compensation claim:

a. The employee must prove the company was negligent.

b. The employer has the right to raise traditional defenses to negligence to defeat the claim.

c. Both a. and b.

d. Neither a. not b.

24. The Workers Rights Consortium:

I. Combats sweatshops by monitoring and investigating working conditions in factories around the world.

II. Is a U.S. government organization.

III. Covers contractors, subcontractors and manufacturers.

a. I. only

b. I and II only

c. I and III only

d. I, II, and III

25. According to Guy Mundlak and Issi Rosen-Zvi, hypotheses for the existence of CSR reports include:

I. They have instrumental value to governments.

II. They are a focal point for persuading the corporate world that a new ethical discourse is emerging.

III. They are created to persuade competitors to adopt similar measures and standards of responsibility.

IV. They are created in an attempt to persuade managers and employees that they should be proud of their workplace.

a. III and IV only

b. I, II and III only

c. II, III and IV only

d. I, II, III and IV

Essay Questions

26. According to Dr. Michael Silverstein, what are the types of risks workers find on the job today?

27. According to Henry Shue, what are the six factors required to make a cost a true harm?

28. Discuss how corporate criminal liability has been handled by OSHA since 1970.

29. Explain how worker’s compensation in the U.S. works.

30. Explain what the Workers Rights Consortium is and what it has done to combat sweatshops.

CHAPTER 6

Environmental Law and Justice: Responsibility and Survival

Questions

31. Which piece of legislation was passed first?

The Clean Water Act

The Resource Conservation and Recovery Act

The Clean Air Act

The Comprehensive Environmental Response, Compensation, and Liability Act

32. Under the ___________ plan, the EPA auctions a set number of sulfur dioxide emission allowances annually, with each allowance permitting one ton of emissions.

allocation of resources

tradeable permit

green capitalism

shareholder activism

33. The Kyoto Protocol is an international treaty to reduce greenhouse admissions, signed by over 200 countries including the United States.

a. True

b. False

34. According to MIT professor Layzer, the lobbyists for the energy corporations have used which of the following tactics to avoid stricter regulation?

I. Portray the science of global warming as uncertain and debatable

II. Focus on the financial costs of regulation

III. Provide Senators and Representatives with financial incentives to vote against regulation

IV. Portray the environmentalists as extremists and a vocal minority.

a. I and II

b. I, II and III

c. I and III

d. I, II and IV

35. When environmentalists recognized that politicians were not going to pass stricter legislation and regulations, they changed their tactics to force change. According to the Layzer article in the chapter, these new tactics included:

a. Eco-terrorism – bombing pipelines and factories.

b. Collaboration with businesses – create partnerships to improve environmental impacts.

c. Public relations campaigns – go public with their accusations and encourage consumers to demand change.

d. Work internally through shareholders to try to change corporate disclosures

I and II

II and III

III and IV

II, III and IV.

36. A “green tax” uses government taxing power to benefit the environment.

a. True

b. False

37. According to John Locke, the purpose of government is to institute restraints to protect property rights.

True

False

38. The power of the U.S. Government to take property from a private individual and use it for public purposes is:

a. Due Process

b. Equal Protection

c. Eminent Domain

d. Suffrage

39. According to Alice Kaswan, environmental justice has had:

a. an extreme impact on environmental law

b. a significant impact on environmental law

c. a modest impact on environmental law

d. no impact on environmental law

40. According to Carmen G. Gonzalez, people go hungry because:

a. there is not enough food available

b. people are too poor to grow food

c. Both a. and b.

d. Neither a. nor b.

Essay Questions

41. Explain how the tradeable permit plan works.

42. Discuss the obligations of human beings to Mother Earth according to the universal declaration of rights of Mother Earth.

43. The power of eminent domain requires the government to provide just compensation to a property owner when taking private property for public purposes. Discuss your thoughts on whether the following should be considered “public purposes.”

a. The government taking private property to transfer to a private company for development of a strip mall.

b. The government taking private property to build a highway.

c. The government taking private property to expand an airport.

44. The Fifth Amendment to the Constitution explicitly protects private property owners’ economic interests. Explain how this amendment affects owners of private property.

45. What is environmental justice? What started the movement in the United States?

46. Explain the Crisis of Agrobiodiversity as explained by Carmen G. Gonzalez.

CHAPTER 7

Marketing and Technology: Choice and Manipulation

Questions

47. Identify the true statement(s) regarding freedom of speech:

XVII. It was not until the 1920s that legal doctrines protecting speech when offensive began to be recognized by the courts.

XVIII. In the First National Bank v. Bellotti case, the Supreme Court struck down a state law prohibiting a corporation to advertise to influence voters on issues that did not “materially affect” its business.

XIX. In the Virginia Board case, the U.S. Supreme Court failed to link the “right to receive information and ideas” with the traditional values that underlie free speech.

XX. According to the Central Hudson decision, “protected commercial speech” cannot be regulated.

I & II only

II & III only

II, III and IV only

I, II III, and IV

48. Citizens have always been afforded freedom of speech after the ratification of the U.S. Constitution.

True

False

49. According to John Kenneth Galbraith, the theory of consumer demand is based on the following broad assumption(s):

I. Socialism will work in all societies because consumers are willing to share their wealth.

II. The urgency of wants does not diminish as more of them are satisfied.

III. Wants originate in the personality of the consumer.

I only

I and II

III only

II and III

50. The Lanham Act:

I. Focuses on trademark registration and protection.

II. Was passed in reaction to the Great Depression.

III. Gives competitors the right to sue for false claims a rival company makes about the competitor’s product.

IV. Does not allow a company to sue for false claims a rival company makes about their own products.

I & II only

II & III only

I, I and III only

I, II III, and IV

51. Obesity in children has continued to rise since 1976 and approximately ¾ of all teens and youth are overweight.

a. True

b. False

52. The “creative revolution” in advertising refers to

a. The move from black and white to color advertising.

b. The move from talking about a product to showing what a product can do.

c. The move from showing what a product can do to making the product a status symbol.

d. The move from making a product a status symbol to using subliminal messaging to “force” consumers to buy the product.

53. The debate over advertising fast food and other “junk foods” to kids is in effect settled, since federal and state laws have put limits on that advertising.

a. True

b. False

54. According to the Learned Intermediary Rule, pharmaceutical manufacturers do not have to warm consumers about drug dangers as long as they have adequately warned physicians.

a. True

b. False

Essay Questions

55. In the case of R.J. Reynolds Tobacco Company, et al. v. FDA, what was the majority opinion regarding the First Amendment and the graphic warning requirements?

56. What forms can deceptive advertising claims take?

57. Discuss some of the ways the FTC has curbed online marketing efforts.

58. What is the Lanham Act? To succeed in suit under the Lanham Act, what must a plaintiff prove?

59. Discuss the standards of the Creative Code of the American Associate of Advertising Agencies.

60. Discuss how the fast food industry’s response to the obesity epidemic in children has changed since the publication of the Surgeon General’s report.

61. Direct-to-consumer advertising of prescription drugs began in the late 1980’s to early 1990’s. Based on the information in the Norplant case in the text, discuss the reasons why it should or should not be allowed.

CHAPTER 8

Allocating Risk and Responsibilities in the Global Marketplace: Products Liability

Questions

62. The term caveat emptor means:

“seller take care”

“empty the cave of deceit”

“buyer beware”

“truth shall prevail”

63. In Wyeth v. Levine, the majority rejected the idea that primary responsibility for drug safety lies with the government and instead lies with the drug manufacturer.

a. True

b. False

64. The Food and Drug Administration, the Consumer Product Safety Commission and the National Highway Transportation Safety Association are

a. Cabinet departments within the Executive Branch

b. Subcommittees of the Senate and House of Representatives within the Legislative Branch

c. Judicially created organizations to implement Supreme Court mandates related to product safety.

d. Independent agencies that report to no branch of government.

65. The organization that works with companies on recalls of unsafe products (such as lead-paint laden Thomas the Train toys) is

a. The Consumer Protection Group (CPG)

b. The Consumer Product Safety Commission (CPSC)

c. The Product Protection People (P3)

d. The Buy American Coalition (BAC)

66. The most notable exception to caveat emptor was for

Food

Automobiles

Clothing

Shoes

67. To win a suit for negligence, a plaintiff must establish that the defendant:

a. breached its duty of care

b. created an unreasonable risk of harm

c. acted with total disregard to the harm that could result

d. behavior was the proximate cause of the plaintiff’s injuries

a. I and II only

b. II and III only

c. I, II and IV only

d. I, II, III and IV

68. The Ford Pinto exploded when rear-ended by another vehicle. The Pinto suffered from a(an):

Design Defect

Manufacturing Defect

Warning Defect

End-user Defect

69. Absent provisions in the contract, which of the following types of damage can be awarded to an injured party under a breach of contract?

a. General damages only

b. General and incidental damages only

c. General, incidental, and special damages only

d. General, incidental, special and punitive damages

70. According to Stephen Sugarman, performance-based regulation happens when:

the government sets targets for how much harm is allowed for each product produced and the company is fined or penalized for any harm beyond the acceptable level.

the government creates a reporting structure for consumers to report corporation performance related to safety or environmental issues and then the government imposes fines by a specific formula for companies who exceed a certain number of negative reports.

consumer advocacy groups work with the independent agencies to determine which corporations are implementing best practices for consumer safety and then create regulations to impose those practices on other companies.

the government analyzes which companies make the most profit, indicating consumer approval of their performance on safety standards and then implement those companies’ practices as legal standards.

Essay Questions

71. What did the Food Safety Modernization Act (FSMA) do? Has it accomplished what it should have? Why or why not?

72. Compare the regulation of biotechnology in the United States to that of the European Union.

73. Explain the features of Section 402A of the Restatement of Torts (Second).

74. What are punitive damages?

75. Explain how injured parties can recover damages under the UCC.

76. Discuss Sugarman’s “Performance-based regulation.” Is this a viable means to create safer products or is it unnecessary government interference?

CHAPTER 9

Ownership, Creativity and Innovation: Intellectual Property

Questions

77. Debora Halbert asserts in her essay that:

women have benefited greatly from intellectual property laws.

intellectual property has historically benefited men more than women.

in the nineteenth century, writing poetry and novels enabled women to not only express themselves intellectually but to reap financial rewards as well.

when women knitted or quilted, they were reluctant to share their patterns with other women.

78. American copyright law creates a bundle of rights for the owner, including the right to reproduce, distribute, perform, display, or adapt the work.

True

False

79. In a lawsuit for copyright infringement, a defendant can avoid liability by successfully arguing _________, based on the notion that the free flow of ideas sometimes requires quoting or borrowing from a copyrighted work.

collective rights

misappropriation

unlimited use

fair use

80. If an author owns a copyright to a non-fiction essay, then publishes that essay in an anthology of similar essays published by a major publishing company, the rights involved in this relationship would be referred to as ______.

collective work

public domain

collective bargaining

joint domain

81. Once the copyright on a work has expired,

a. The owner can renew it for a new term

b. The work is in the public domain

c. The work becomes the property of the government

d. The work is considered no longer creative

82. The difference between the Project Gutenberg (PG) and the Google book scanning project is:

a. The PG limits itself to the “classics”

b. The PG limits itself to only works in the public domain

c. Google only digitizes full documents but the PG digitizes key segments

d. The PG limits itself to “orphan” works – those with hard-to-find authors or owners.

83. Nike’s swoosh, McDonald’s arches, and the Xerox name are all identifiable trademarks. Which of the following laws protect(s) them?

XXI. Lanham Trademark Act of 1946

XXII. Federal Trademark Dilution Revision Act of 2006

XXIII. Sonny Bono Act of 1998

I only

II only

I and II

II and III

84. In order to obtain a patent under U.S. Patent Law, an inventor must have an invention that is

I. Not obvious

II. Unique

III. Useful

IV. Not a modification of any prior patents

a. I only

b. I and II

c. I, II and III

d. I, II, III and IV

85. Trade secrets are registered just like trademarks.

a. True

b. False

Essay Questions

86. Discuss how intellectual property is different from other kinds of property.

87. What must a plaintiff prove to establish copyright infringement?

88. Give a brief description of the increased protection in U.S. Copyright laws starting in 1994 and using approximate dates.

89. Discuss the Fair Use Doctrine. What are the four statutory factors used to determine if a use is fair?

90. Why was the Digital Millennium Copyright Act passed?

91. Discuss U.S. patent law. Give examples of items that can and cannot be patented.

92. Give examples of improper ways to learning a trade secret under the Uniform Trade Secrets Act. Give an example of a way that is not considered improper or wrong.

#LEG 500 Week 11 Final Exam – Strayer NEW

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