Test Bank For The Legal Environment Of Business: Text And Cases, 9th Edition

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HighlightsofTest BankTest Bankcontains more than1,200questionsEach Chapter ofTest Bankincludes—True-FalseQuestionsandMultiple-ChoiceQuestions, includingHypotheticals & Fact Patterns with series of questions, andEssayQuestionsAnswersto all questionsReferencesto the specificsectionsof the text that discuss the lawrelating to the questions & answersAnAnnotation Systemthat reveals when a question is:new (N),revised from the last edition (+), or the same as in the last edition (=).AnAnnotation Systemthat tells you whichAACSB SkillandAICPA Skilleach question fulfills.Unit Appendices with questions onfeatures&“Focus on Ethics”sectionsTest Bankis also available onExamView® Pro, the acclaimedcomputerized testing system.WithExamView® Pro, instructors can—Set upthePage Layoutfor testsAdd or Editquestions & answers andSelectquestions at random orby numberViewsummaries of the test orTest Bankchapters

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1© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied orduplicated, or posted to a publiclyaccessible website, in whole or in part.Chapter 1Law andLegal ReasoningN.B.:TYPEindicates that a question is new, modified, or unchanged, as follows.NAquestionnewto this edition of the Test Bank.+A questionmodifiedfrom the previous edition of the Test Bank.=A questionincludedin the previous edition of the Test Bank.TRUE/FALSE QUESTIONS1.Laws and government regulations affect almost all business activities.ANSWER:TPAGES:Section 1TYPE:NBUSPROG: AnalyticAICPA: BB-Legal2.The U.S. Constitution is thebasis of alllawinthe United States.ANSWER:TPAGES:Section 2TYPE:+BUSPROG: AnalyticAICPA: BB-Legal3.TheU.S.Constitutionreservestothefederalgovernmentallpowersnotgranted to the states.ANSWER:FPAGES:Section 2TYPE:NBUSPROG: AnalyticAICPA: BB-Critical Thinking4.TheUniform Commercial Codehas been adopted in all fifty states.ANSWER:TPAGES:Section 2TYPE:+BUSPROG:ReflectiveAICPA: BB-Critical Thinking

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2TEST BANK—UNIT ONE:THE FOUNDATIONS© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publiclyaccessible website, in whole or in part.5.Federalagency regulations take precedenceover conflictingstateagencyregulations.ANSWER:TPAGES:Section 2TYPE:+BUSPROG: AnalyticAICPA: BB-Legal6.Common lawis a term for the laws that are familiar to most of us.ANSWER:FPAGES:Section 3TYPE:=BUSPROG: AnalyticAICPA: BB-Critical Thinking7.Decisionsbyhighercourtsarenotbinding onlowercourts.ANSWER:FPAGES:Section 3TYPE:+BUSPROG: AnalyticAICPA: BB-Legal8.Stare decisisis a doctrine obligating judges to help persons who have failed toprotect their own rights.ANSWER:FPAGES:Section 3TYPE:=BUSPROG: AnalyticAICPA: BB-Legal9.Courts arenotobligated to follow precedents.ANSWER:FPAGES:Section 3TYPE:NBUSPROG:ReflectiveAICPA: BB-Critical Thinking10.In most legal controversies, there is one single correct result.ANSWER:FPAGES:Section 3TYPE:NBUSPROG: AnalyticAICPA: BB-Critical Thinking11.Although cases may be similar, no two cases are ever identical in all respects.ANSWER:TPAGES:Section 3TYPE:NBUSPROG: AnalyticAICPA: BB-Critical Thinking

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CHAPTER 1: LAW AND LEGAL REASONING3© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publiclyaccessible website, in whole or in part.12.The courts, in interpreting statutory law,often rely on the common law as aguide to what the legislators intended.ANSWER:TPAGES:Section 3TYPE:NBUSPROG: AnalyticAICPA: BB-Critical Thinking13.Each judge had his or her personal beliefs and philosophy, which shape thelegalreasoning process.ANSWER:TPAGES:Section4TYPE:NBUSPROG:ReflectiveAICPA: BB-Critical Thinking14.Clearly, a judge’s function is tomakethe laws.ANSWER:FPAGES:Section 4TYPE:NBUSPROG: AnalyticAICPA: BB-Critical Thinking15.Ajury’s good sense and careful consideration of consequences is known asjurisprudence.ANSWER:FPAGES:Section 4TYPE:=BUSPROG:ReflectiveAICPA: BB-Critical Thinking16.Procedural law consists of all laws that outline the methods ofenforcing rights.ANSWER:TPAGES:Section 5TYPE:NBUSPROG: AnalyticAICPA: BB-Legal17.A citation identifies the publication in which a legal authority can be found.ANSWER:TPAGES:Section 6TYPE:NBUSPROG: AnalyticAICPA: BB-Research18.The decisions made by the courts establish the boundaries of the law as itapplies to almost all business relationships.ANSWER:TPAGES:Section 7TYPE:NBUSPROG: AnalyticAICPA: BB-Critical Thinking

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4TEST BANK—UNIT ONE:THE FOUNDATIONS© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publiclyaccessible website, in whole or in part.19.The party against whom a lawsuit is brought is theplaintifforpetitioner.ANSWER:FPAGES:Section 7TYPE:NBUSPROG: AnalyticAICPA: BB-Critical Thinking20.When all the judges (or justices) agree on a decision, amajority opinioniswritten for the entire court.ANSWER:FPAGES:Section 7TYPE:NBUSPROG:ReflectiveAICPA: BB-Critical ThinkingMULTIPLE-CHOICE QUESTIONS1.Data Analytics, Inc., is acorporation engaged in the business of compiling,analyzing, and marketing data. To accomplish its purposes, Data Analyticsobtainsfinancing,andhiresandfiresemployees.Lawsandgovernmentregulations affect such business activities asa.hiring and firing decisions.b.the manufacturing and marketing of products.c.business financing.d.all of the choices.ANSWER:DPAGES:Section 1TYPE:NBUSPROG:ReflectiveAICPA: BB-Critical Thinking2.The U.S. Congress enacts a new federal statute that imposes liability onbusinesseshiring employees without verifying their citizenship status. Thisstatute appliesa.only tobusinessesnot covered by state law.b.only to those states thatconsent to apply it.c.to all of the states.d.to none of the states.ANSWER:CPAGES:Section 2TYPE:+BUSPROG:ReflectiveAICPA: BB-Legal

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CHAPTER 1: LAW AND LEGAL REASONING5© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publiclyaccessible website, in whole or in part.3.A provision in the California state constitution conflicts with a provision in theU.S. Constitution. Ifchallengeda.neither provision will be enforced.b.the provisions will be balanced to reach a compromise.c.the state provision, not the U.S. Constitution, will be enforced.d.the U.S. Constitution, not the state provision, will be enforced.ANSWER:DPAGES:Section 2TYPE:+BUSPROG:ReflectiveAICPA: BB-Legal4.ThePennsylvanialegislatureenactsastatelawthatviolatestheU.S.Constitution. This law can be enforced bya.no one.b.the federal government only.c.the state ofPennsylvania only.d.the United States Supreme Court only.ANSWER:APAGES:Section 2TYPE:NBUSPROG:ReflectiveAICPA: BB-Legal5.The Bay City Planning Department, the Coastal County Zoning Commission,the Delaware Environmental QualityAgency, and the U.S. Bureau of LandManagement issue regulations.These rules constitutea.administrative law.b.case law.c.stare decisis.d.statutory law.ANSWER:APAGES:Section 2TYPE:NBUSPROG:ReflectiveAICPA: BB-Critical Thinking

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6TEST BANK—UNIT ONE:THE FOUNDATIONS© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publiclyaccessible website, in whole or in part.6.Charles is a federal judge whose judicial decisions are part of case law, whichdoesnotinclude interpretations ofa.regulations created by administrative agencies.b.constitutional provisions.c.statutes enacted by legislatures.d.soundbites in the media.ANSWER:DPAGES:Section 2TYPE:NBUSPROG:ReflectiveAICPA: BB-Legal7.Much of American law is based ona.the English legal system.b.the French legal system.c.Greekcivil law.d.ancient Chinese law.ANSWER:APAGES:Section 3TYPE:NBUSPROG:ReflectiveAICPA: BB-Legal8.Larry enters into a contract with Motivational Education Services to host apanel discussion at a sales conference. When the conference is postponedindefinitely, Larry asks a court tocancel the contract and return the parties tothe positions that they held before its formation. This request involvesa.specific performance.b.an injunction.c.rescission.d.an action that the court cannot order.ANSWER:CPAGES:Section 3TYPE:NBUSPROG:ReflectiveAICPA: BB-Legal

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CHAPTER 1: LAW AND LEGAL REASONING7© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publiclyaccessible website, in whole or in part.9.Bob’s Big Burgers n’ Shakes Restaurant brings a suit, seeking a remedy at law.Aremedy at lawisa.monetary damages.b.a decree of specific performance.c.a judicial proceeding for theresolution of a dispute.d.an injunction.ANSWER:APAGES:Section 3TYPE:NBUSPROG:ReflectiveAICPA: BB-Critical Thinking10.Maggie and Nate enter into a contract for the sale of a car, but Nate laterrefuses to deliver the car. Maggie asks a court to order Nate to perform aspromised. Ordering a party to perform what was promised isa.specific performance.b.damages.c.rescission.d.beyond the court’s authority.ANSWER:APAGES:Section 3TYPE:NBUSPROG:ReflectiveAICPA: BB-Decision Modeling11.Jane enters into a contract with Jill to provide 100 roses for a dinner party. Jillfails to deliver the roses. Jane initiates a suit against Jill, asking the court toorder Jill to refund Jane’s payment. Jane isa.the plaintiff.b.the defendant.c.the binding authority.d.the persuasive authority.ANSWER:APAGES:Section 3TYPE:NBUSPROG:AnalyticAICPA: BB-Legal

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8TEST BANK—UNIT ONE:THE FOUNDATIONS© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publiclyaccessible website, in whole or in part.12.Sara believes that she has a strong case against Tom for the breach of anemploymentcontract. Despite this belief, Sara cannot file a suit against Tomafter the expiration of the time allowed for the filing undera.astatute of limitations.b.the doctrine of laches.c.anequitablemaxim.d.theremedyat law.ANSWER:APAGES:Section 3TYPE:NBUSPROG:ReflectiveAICPA: BB-Legal13.In the case ofRetail Sales Corp. v. Trucking Delivery Co., the courtmay rulecontrary to a precedent if the court decides that the precedenta.is incorrect or inapplicable.b.is not in linewith the judge’s personal values.c.would lead to unintended consequences.d.would not bring about the result the judge prefers.ANSWER:APAGES:Section 3TYPE:NBUSPROG:ReflectiveAICPA: BB-Legal14.Karen is a judge hearing the case ofLocal Dispatch Co. v. National TransportCorp.Applying the relevant rule of law to the facts of the case requires Karento find cases on point—previously decided cases that, in relation to the caseunder consideration, area.as different as possible.b.as similar as possible.c.at odds.d.exactly identical.ANSWER:BPAGES:Section 3TYPE:NBUSPROG:AnalyticAICPA: BB-Legal

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CHAPTER 1: LAW AND LEGAL REASONING9© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publiclyaccessible website, in whole or in part.15.Juanis a judge. HowJuanand the judges in other courts interpret aparticularstatute determinesa.how that statute will be applied.b.how the law needs to be changed.c.how the common law should be codified.d.nothing.ANSWER:APAGES:Section 3TYPE:=BUSPROG:AnalyticAICPA: BB-Legal16.ToSam, the written law of a particular society at a particular time is mostsignificant.Samisaa.legal positivist.b.person who adheres to the historical school of legal thought.c.legal realist.d.person who adheres to the natural law tradition.ANSWER:APAGES:Section 4TYPE:+BUSPROG:AnalyticAICPA: BB-Critical Thinking17.Dave and Ellen enter into a contract via e-mail. When a dispute arises over theperformance of the deal, Dave files a suit against Ellen. The emerging body oflaw that governs transactions conducted via the Internet is referred to by theterma.cyberlaw.b.civil law.c.equitable maxims.d.IRAC.ANSWER:APAGES:Section 5TYPE:NBUSPROG:ReflectiveAICPA: BB-Critical Thinking

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10TEST BANK—UNIT ONE:THE FOUNDATIONS© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publiclyaccessible website, in whole or in part.18.Beth is a victim of Carl’s violation of a criminal law. Criminal law is concernedwitha.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:DPAGES:Section 5TYPE:NBUSPROG:ReflectiveAICPA: BB-Research19.TheNebraskaSupreme Courtissues an opinion that canbe found at 285 Neb.88, 825 N.W.2d 429. “285” isa.the number of the volume in the official reports of the court’s decisions.b.the number of the volume in Thomson Reuter’s unofficial publication ofthe court’s decisions.c.a page number in the appropriate volume.d.the number of the case in the sequence decided by the state’s highestcourt.ANSWER:APAGES:Section 6TYPE:NBUSPROG:ReflectiveAICPA: BB-Research20.Operational Processes, Inc., appeals a decision against it, in favor ofPrecisionManufacturing Corporation, from a lower court to a higher court. OperationalProcessesisa.the appellant.b.the appellee.c.the defendant.d.the respondent.ANSWER:APAGES:Section 7TYPE:+BUSPROG:ReflectiveAICPA: BB-LegalESSAY QUESTIONS1.In a lawsuit betweenCloud ComputingCorporation andDigital Enterprises,Inc., the court applies the doctrine ofstare decisis.What is this doctrine? Whatdoes this doctrine have to do with the American legal system?

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CHAPTER 1: LAW AND LEGAL REASONING11© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publiclyaccessible website, in whole or in part.ANSWER:In acommon law legal system, past judicial decisions are bindingin current disputes with similar facts. This feature of the common law, which isthe basis of the American legal system, is unique because, unlike the law inother legal systems, it is judge-made law. Within the common law system,when possible, judges attempt to be consistent and to base their decisions onthe principles suggested by earlier cases. The body of principles and doctrinesthat form the common law emerged over time as judges applied the principlesannounced in earlier cases to subsequent legal controversies.The practice of deciding cases with reference to former decisions, orprecedents—thecornerstoneoftheAmericanlegalsystem—iscalledthedoctrine ofstare decisis. Under this doctrine, judges are obligated to follow theprecedents established within their jurisdictions. This helps courts to be moreefficient and makes the law more stable and predictable.PAGES:Section 3TYPE:=BUSPROG:ReflectiveAICPA: BB-Critical Thinking2.For a business law class,Sierrareads and briefs several court opinions usingthe IRAC method of legal reasoning. What do the letters I, R, A, and Cabbreviate? What are the steps in the IRAC method?ANSWER:The letters I, R, A, and Care the first letters of“Issue,” “Rule,”“Application,” and “Conclusion.”TheIRACmethodoflegalreasoningrequiresSierraoranyotherstudent or reader to first summarize the important facts of a legal case andstate the salient issue orissues. The second step is to determine and set outthe rule of law that applies to the facts to resolve the issue. The third step is toapply that rule to those facts. The application of the rule requires an answer tothe question posed by the issue. This answer may involve one or more differenttypesoflegalreasoning,butthosereasonsshouldbethoughtoutandexpressed clearly. Finally, the conclusion derived from the application of therule to the facts is stated. This is sometimes referred to as the result or theoutcome in a case—who won;who lost;what the award, if any, consists of;orwhat the parties are, or are not, required to do next.PAGES:Section 3TYPE:=BUSPROG:ReflectiveAICPA: BB-Legal

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1©2015CengageLearning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publiclyaccessible website, in whole or in part.Appendix A for Unit OneQuestions on the FeaturesN.B.:TYPEindicates that a question is new, modified, or unchanged, as follows.NAquestionnewto this edition of the Test Bank.+A questionmodifiedfrom the previous edition of the Test Bank.=A questionincludedin the previous edition of the Test Bank.CHAPTER 4—INSIGHT INTO THE GLOBAL ENVIRONMENT:BRIBERY AND THE FOREIGN CORRUPT PRACTICES ACT1.Mexican employees ofFarmacosLtd., a subsidiary ofGlobal Pharmaceuticals,Inc., a U.S. firm, offer cash and gifts to regional Mexican government officials toobtain their approval of favorable contracts.Steps thatcompanymanagersmight take to end the practice and to influence other employees not to engagein similar conduct includea.termination of the employees who offered the bribes.b.mandatory antibribery training for all employees.c.audit of companyexpensesto expose illegal and unethical payments.d.all of the choices.ANSWER:DPAGES:Section 5TYPE:NBUSPROG:EthicsAICPA: BB-Critical Thinking

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2TEST BANK—UNIT ONE:THE FOUNDATIONS©2015CengageLearning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publiclyaccessible website, in whole or in part.UNIT ONE—FOCUS ON LEGAL ETHICS:ETHICS AND THE LEGAL ENVIRONMENT OF BUSINESS2.Energy Resources Company develops its marketing strategies in terms of whatitsmanagement perceives as its ethical obligations, which represent itsa.legal liability.b.profitability.c.standards of right and wrong.d.unilateral corporate duties.ANSWER:CPAGES:Focus on EthicsTYPE:=BUSPROG:EthicsAICPA: BB-Critical Thinking3.Commercial Wholesale, Inc., conducts its operations unethically, which, whenrevealed, will likely affect itsa.good will only.b.profits only.c.reputation only.d.good will, profits, and reputation.ANSWER:DPAGES:Focus on EthicsTYPE:=BUSPROG:EthicsAICPA: BB-Risk Analysis

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