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ETH 321 Final Exam Guide NEW

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Which of the following statements is true of a
grand jury?

A grand jury has the authority to subpoena

business records relevant to a lawsuit.

A grand jury determines whether the accused in a

lawsuit is innocent or guilty.

At least 20 members should be present on a grand

jury to examine evidences and vote on a case.

For an indictment to be returned, only one-third of

a grand jury needs to agree that a crime has been
Alan and Miriam are engaged in a debate on the
importance of intellectual property rights. While
Alan holds the view that intellectual property
protection safeguards the interests of businesses,
Miriam thinks that it ultimately puts businesses at
a disadvantage by hampering the dissemination of
information. Which of the following arguments is
most likely to be raised by Alan to strengthen his

Intellectual property rights reduce the pace of

research and development drastically.

Intellectual property rights result in an increased

availability of products.

Intellectual property rights reduce businesses’

market share by facilitating competition.

Intellectual property rights allow businesses to

charge premium prices for their products.
According to the __________, the acceptance of an
offer results in a binding contract only if it exactly
matches the terms of the offer.
mirror image rule

parol evidence rule

exclusive remedy rule

mailbox rule
The __________ enacted in 1938 established
minimum wage, overtime pay, and record-keeping

Uniformed Services Employment and

Reemployment Rights Act

Family and Medical Leave Act

Fair Labor Standards Act

Worker Adjustment and Retraining Notification

The term __________ refers to the placing of an
individual in immediate apprehension for his or
her physical safety.



The term __________ refers to any change in the
ownership of a business organization that would
alter its legal existence.




Which of the following statements is true of the
Securities and Exchange Commission?

Its members are appointed by the senate for a

term of four years.

It is responsible for implementing the federal

securities laws.
It lacks the authority to frame rules regarding
transactions of securities.

Its members are either lawyers or security

A system of equally applied law is a necessity for
the foundation of a strong, productive economy
because it:

allows economically strong nations to exploit the

resources of weaker nations.

incentivizes private businesses to restrict job

opportunities for well-educated people.

encourages strangers to make agreements on

certainty and trust.

prohibits individuals from trading in modern

private markets.
Which of the following scenarios illustrates a
formalist approach to business decisions?

Selling products by deceiving customers about

possible negative aspects of the products

Monitoring employee browsing history without

their consent to curb non-productive activities

Informing new customers about delays in

production schedules

Assigning significantly high productivity targets to

reduce costs
A(n) __________ refers to the individual or business
entity offering a security for sale to the public.

controlling person



Windy and Ruby plan to present a paper on
intellectual property rights. They decide that
Windy will present the arguments in favor of
intellectual property rights and that Ruby will
argue how intellectual property rights could be
detrimental to businesses and their customers.
Which of the following is most likely to be Ruby’s

Intellectual property rights reduce businesses’

prospects of economic return on investment.

Intellectual property rights reduce the pace of

research and development drastically.

Intellectual property rights result in a decrease in

the availability of products.

Intellectual property rights do not allow

businesses to charge premium prices for their
Which of the following statements is true of white-
collar crimes?

They are usually committed for personal financial


They rarely affect consumers of a business.

They rarely occur in business environments.

They are dependent on the threat of physical force.
Which of the following scenarios illustrates a
bilateral contract?

Grapevine Inc. follows a five-day workweek system

and also offers a compressed workweek option.

Sameera, a writer, signs a contract with her

publisher to publish her book.

Helen, a painter, signs a contract with an art

gallery that agrees to purchase her painting for

The management of Uno Inc. offers additional

benefits to its employees annually.
The Equal Employment Opportunity Commission
was created through the __________.

National Labor Relations Act

Civil Rights Act

Age Discrimination in Employment Act

Americans with Disabilities Act
Concerted efforts to lobby government officials,
irrespective of their anticompetitive purposes, are
given an exception from the Sherman Act under
the __________.

overbreadth doctrine

Colgate doctrine

Noerr-Pennington doctrine

incorporation doctrine
A __________ is the simplest and least expensive
business institution to create.

limited liability company


sole proprietorship

In a state court system, lawsuits filed by parties
typically begin at the __________.

federal district court level

appellate court level

trial court level

supreme court level

According to the Commerce Clause, the power to
regulate interstate commerce is vested with

state governments

state-level courts

the federal government

the U.S. Supreme Court

A business decision maker’s decision is more likely
to raise ethical concerns in a society where:

there is an increase in demand for public

the family structure is stable.

the news media and the Internet have significant


there is a decrease in economic interdependence.

How does law hold diverse people of different
backgrounds into large, organized groups?

It prevents enforcement institutions from

enforcing written rules on strangers.

It tells the members of a society what they can and

cannot do.

It discourages people from making agreements

based on certainty and trust.

It allows strangers to adopt rules that support

their beliefs.
Courts determine whether the language of an offer
was clear enough to result in a contract by:

examining the objective intent of the offeror.

investigating whether an offeree actually accepted
the offer.

examining the adequacy of the consideration


analyzing whether the terms of the acceptance

matches the terms of the offer.
Who among the following individuals commits a

Amanda, who fires her employee Trevor without

any notice and causes him severe mental distress

Yuki, who injures her boss Reese with a knife and

inflicts serious injuries on him

Joan, the customer care manager in a retail store,

who verbally threatens a customer who calls to
complain about a faulty product

Vincent, the CEO of Gregon Inc., who pays media

firms to circulate false information about Gregon’s
chief competitor
Fuzo Inc., a manufacturer of leather bags, enters
into a contract with a firm regarding the
installation of a machine in Fuzo’s factory. Fuzo
agrees to pay $1000 for the machine and another
$200 as the installation charge. In this scenario,
the terms of the sale will be covered under

the Federal Arbitration Act

the Uniform Commercial Code

the Foreign Corrupt Practices Act

the Internal Revenue Code

The term __________ refers to the act of referring a
matter to arbitration.




__________ is a legal remedy to a breach of contract by
which each party to the contract returns the
consideration offered by the other.


Specific performance

Negotiated settlement

Which of the following statements is true of
alternative dispute resolution (ADR) systems?

ADR systems increase the costs incurred during

the litigation process.

The parties to a dispute need not present the case

to a jury before opting for ADR systems to settle
the dispute.

ADR systems cannot be used for dispute resolution

in contractual relationships unless they are
specified in the contract.

The litigation process precludes the use of ADR

The __________ is the constitutional provision that
details the federal government’s power to regulate
business activities.

Commerce Clause

liquidated damages clause

equal protection clause

supremacy clause
Which of the following legal remedies to a breach
of contract allows the parties to the contract to
agree to abide by the decision of a third party or


Specific performance

Negotiated settlement

__________ refers to an agreement made between
competitors in an industry to fix prices of their

Horizontal price fixing

Resale price fixing

Indirect price fixing

Vertical price fixing

The petition for a writ of certiorari by the losing
party of a litigation will be reviewed by the U.S.
Supreme Court:

if the winning party agrees to subsequent reviews.

if the federal district courts and the courts of

appeal correct the judicial errors charged against
the state court.

if at least one of the nine justices vote to take the


if there is a major conflict between the trial and

appellate courts on the interpretation of federal