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Essentials of Business Law Anthony Liuzzo 10th Edition- Test Bank
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Chapter 2 Ethics and the Law
1) The development of technology has introduced a burgeoning array of ethical questions.
Answer: TRUE
Explanation: The development of technology has introduced a burgeoning array of ethical questions.
Difficulty: 1 Easy
Topic: Unethical Behavior in our World
Learning Objective: 02-01 Cite some examples of how unethical behavior in our world has negatively affected business practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
2) Morals are the standards and principles that society has adopted as a guide for the behavior of the individual within society.
Answer: FALSE
Explanation: Ethics is about the standards and principles that society has adopted as a guide for the behavior of the individual within society.
Difficulty: 1 Easy
Topic: Morals, Ethics, and Values
Learning Objective: 02-02 Distinguish among ethics, morals, and values. Cite several influences on group and individual values.
Bloom’s: Remember
AACSB: Reflective Thinking
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3) Legal and moral beliefs and standards are derived from values.
Answer: FALSE
Explanation: Ethical and moral beliefs and standards are derived from values – that is, the beliefs or standards considered worthwhile.
Difficulty: 1 Easy
Topic: Morals, Ethics, and Values
Learning Objective: 02-02 Distinguish among ethics, morals, and values. Cite several influences on group and individual values.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
4) Ethics concern behavior of society within the world.
Answer: FALSE
Explanation: Ethics are the standards and principles for the behavior of individuals within a society.
Difficulty: 1 Easy
Topic: Morals, Ethics, and Values
Learning Objective: 02-02 Distinguish among ethics, morals, and values. Cite several influences on group and individual values.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
5) There is only one kind of value — individual value.
Answer: FALSE
Explanation: There are group values and individual values, both influenced by religion, traditions, and customs.
Difficulty: 1 Easy
Topic: Morals, Ethics, and Values
Learning Objective: 02-02 Distinguish among ethics, morals, and values. Cite several influences on group and individual values.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
6) Values held by a subculture may never differ from those of the larger culture.
Answer: FALSE
Explanation: Values held by a subculture – for example, employees of a corporation, or a department within a company – may differ from those of the larger culture.
Difficulty: 1 Easy
Topic: Morals, Ethics, and Values
Learning Objective: 02-02 Distinguish among ethics, morals, and values. Cite several influences on group and individual values.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
7) An individual’s values are not influenced at all by those held in the groups to which he or she belongs.
Answer: FALSE
Explanation: An individual’s values are significantly influenced by those held by the groups to which he or she belongs.
Difficulty: 1 Easy
Topic: Morals, Ethics, and Values
Learning Objective: 02-02 Distinguish among ethics, morals, and values. Cite several influences on group and individual values.
Bloom’s: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
8) Ethical issues are multifaceted, unlike laws which typically require specific behavior.
Answer: TRUE
Explanation: Ethical issues may be multifaceted. A legal mandate typically is more precise than an ethical consideration.
Difficulty: 1 Easy
Topic: The Relationship Between Law and Ethics
Learning Objective: 02-03 Discuss the relationship between law and ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
9) Businesses acting on their ethical considerations usually do not focus on corporate responsibility and the development of codes of conduct.
Answer: FALSE
Explanation: Businesses concerned with ethics usually focus on their corporate responsibility and the development of codes of conduct.
Difficulty: 1 Easy
Topic: Ways to Ensure Ethical Practices
Learning Objective: 02-05 Discuss some ways businesses can ensure ethical practices.
Bloom’s: Remember
AACSB: Ethics
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10) Credo is a Latin term that is used to describe corporate codes of ethics that employees are expected to follow.
Answer: TRUE
Explanation: Some firms or industries establish a code of ethics, sometimes called a credo or a values statement, that sets down the principles of ethical behavior expected of personnel in various situations.
Difficulty: 1 Easy
Topic: Ways to Ensure Ethical Practices
Learning Objective: 02-05 Discuss some ways businesses can ensure ethical practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
11) A corporate code of ethics is a set of guidelines limited in compliance and enforcement to the most senior management of a corporation.
Answer: FALSE
Explanation: Many firms expect all employees to strictly follow codes of ethics.
Difficulty: 1 Easy
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Remember
AACSB: Ethics
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12) It is possible for a corporation’s code of ethics to make it clear what a company expects of its personnel in terms of the ethical dimensions of corporate policies and actions.
Answer: TRUE
Explanation: A corporation’s code of ethics makes clear that the company expects its personnel to recognize the ethical dimensions of corporate policies and actions.
Difficulty: 1 Easy
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
13) Educational institutions that teach business leaders have responded to the increased need to examine ethics by ignoring the subject area of ethics and allowing business leader to develop their own personal knowledge on the subject.
Answer: FALSE
Explanation: Educational institutions have responded to the increased need to examine ethics by adding courses, workshops, and programs, and have expanded the study of ethics in existing courses.
Difficulty: 1 Easy
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
14) Trade associations are a source of ethical business practices since they typically develop industry guidelines.
Answer: TRUE
Explanation: Trade associations develop guidelines for ethical business practices for their diverse memberships.
Difficulty: 1 Easy
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
15) A defendant is an individual who calls attention to illegal actions in the workplace by notifying their employer or the government.
Answer: FALSE
Explanation: A whistleblower is an employee who discloses to the government, media, or upper management that the company is involved in wrongful or illegal activities.
Difficulty: 1 Easy
Topic: Ways to Ensure Ethical Practices
Learning Objective: 02-05 Discuss some ways businesses can ensure ethical practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
16) The fact that the Enron and Arthur Anderson cases dominated the media and resulted in numerous congressional investigations showed the widespread concern with:
- A) the role of educational institutions in the field of ethics.
- B) the overregulation of corporations.
- C) the power of the government.
- D) ethical behavior in business.
Answer: D
Explanation: The fact that the Enron and Arthur Anderson cases dominated the media and resulted in numerous congressional investigations showed the widespread concern with ethical behavior in business.
Difficulty: 1 Easy
Topic: Unethical Behavior in our World
Learning Objective: 02-01 Cite some examples of how unethical behavior in our world has negatively affected business practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
17) The 2002 Sarbanes-Oxley statute established a board to oversee accounting practices in (the):
- A) Canada.
- B) Netherlands.
- C) United Kingdom.
- D) United States.
Answer: D
Explanation: The Sarbanes-Oxley statute placed an onus on upper management to closely monitor the financial dealings and disclosures of their firms and established a board to oversee accounting practices in the United States.
Difficulty: 1 Easy
Topic: The Relationship Between Law and Ethics
Learning Objective: 02-03 Discuss the relationship between law and ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
18) Ethical issues involving the Internet and computer technology have prompted people to consider ethical issues such as:
- A) easements.
- B) false imprisonment.
- C) discrimination.
- D) privacy.
Answer: D
Explanation: Ethical issues involving the Internet and computer technology have prompted people to consider ethical issues such as privacy and free speech.
Difficulty: 1 Easy
Topic: Unethical Behavior in our World
Learning Objective: 02-01 Cite some examples of how unethical behavior in our world has negatively affected business practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
19) Today’s business professionals involved in global markets are sometimes faced with ethical predicaments because of different:
- A) global standards of ethics.
- B) languages.
- C) modes of transport.
- D) values of money.
Answer: A
Explanation: The expansion of global markets has presented today’s business professionals with ethical predicaments as they have to cope with different standards of ethics in other countries and cultures.
Difficulty: 1 Easy
Topic: Unethical Behavior in our World
Learning Objective: 02-01 Cite some examples of how unethical behavior in our world has negatively affected business practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
20) Beliefs and standards that are considered to be worthwhile are known as:
- A) discretions.
- B) morals.
- C) ethics.
- D) values.
Answer: D
Explanation: Values are beliefs or standards considered worthwhile, and from which a society derives its moral rules.
Difficulty: 1 Easy
Topic: Morals, Ethics, and Values
Learning Objective: 02-02 Distinguish among ethics, morals, and values. Cite several influences on group and individual values.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
21) ________ are beliefs as to what an individual or society believes is right or wrong.
- A) discretions.
- B) morals.
- C) ethics.
- D) values.
Answer: B
Explanation: Morals are individual and societal beliefs as to what is right and wrong.
Difficulty: 1 Easy
Topic: Morals, Ethics, and Values
Learning Objective: 02-02 Distinguish among ethics, morals, and values. Cite several influences on group and individual values.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
22) The standards and principles that govern an individual within society is called:
- A) ethics.
- B) religion.
- C) values.
- D) morals.
Answer: A
Explanation: Ethics consist of the standards and principles of behavior of individuals within a society.
Difficulty: 1 Easy
Topic: Morals, Ethics, and Values
Learning Objective: 02-02 Distinguish among ethics, morals, and values. Cite several influences on group and individual values.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
23) All of the following are influencing factors on both group values and individual values EXCEPT:
- A) wealth.
- B) customs.
- C) religion.
- D) traditions.
Answer: A
Explanation: There are group values and individual values, and both are influenced by religion, traditions, and customs.
Difficulty: 1 Easy
Topic: Morals, Ethics, and Values
Learning Objective: 02-02 Distinguish among ethics, morals, and values. Cite several influences on group and individual values.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
24) A larger culture has a certain genre of values that are different from the values held by employees of a corporation or by a department within a company. This may be known as a:
- A) counter-culture.
- B) para-culture.
- C) cross-culture.
- D) subculture.
Answer: D
Explanation: The values held by a subculture, such as employees of a corporation or a department within a company, may differ from those of the larger culture.
Difficulty: 1 Easy
Topic: Morals, Ethics, and Values
Learning Objective: 02-02 Distinguish among ethics, morals, and values. Cite several influences on group and individual values.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
25) Ethical Considerations come from:
- A) authorities.
- B) government.
- C) elected leaders.
- D) individuals/organizations.
Answer: D
Explanation: Ethical considerations generally spring from within the individual or organization.
Difficulty: 1 Easy
Topic: The Relationship Between Law and Ethics
Learning Objective: 02-03 Discuss the relationship between law and ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
26) As a result of cases like Enron, Congress passed the ________ Act which requires upper management of corporations to more closely supervise the accounting practices of their corporations.
- A) Sarbanes-Oxley
- B) Hatch-Williams
- C) Burr-Collins
- D) Obama-Clinton
Answer: A
Explanation: As a result of cases like Enron, Congress passed the Sarbanes-Oxley Act which placed greater responsibility on upper management to closely monitor the financial dealings and disclosures of firms in the United States.
Difficulty: 1 Easy
Topic: The Relationship Between Law and Ethics
Learning Objective: 02-03 Discuss the relationship between law and ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
27) Governments may impose on individuals or groups a set of duties through laws or regulations known as:
- A) corporate bylaws.
- B) ethical considerations.
- C) societal norms.
- D) legal mandates.
Answer: D
Explanation: Legal mandates are imposed on individuals or groups by authorities or governments.
Difficulty: 1 Easy
Topic: The Relationship Between Law and Ethics
Learning Objective: 02-03 Discuss the relationship between law and ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
28) A distinction between law and ethics is that legal mandates issued by a government are usually more ________ than ethical considerations.
- A) precise
- B) flexible
- C) vague
- D) flawed
Answer: A
Explanation: A distinction between law and ethics is that legal mandates are usually more precise.
Difficulty: 1 Easy
Topic: The Relationship Between Law and Ethics
Learning Objective: 02-03 Discuss the relationship between law and ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
29) The actions of corporations that are intended to demonstrate the corporate wish to behave in a compliant fashion take many forms and are conducted under the banner of:
- A) corporate responsibility.
- B) national mandate.
- C) patriotic duties.
- D) corporate governance.
Answer: A
Explanation: The actions of corporations that are intended to demonstrate the corporate wish to behave responsibly take many forms and are conducted under the banner of corporate responsibility.
Difficulty: 1 Easy
Topic: Responses to Ethical Issues
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
30) A code of ethics is also known as a(n):
- A) covenant.
- B) epilogue.
- C) credo.
- D) quantum.
Answer: C
Explanation: Some firms or industries establish a code of ethics, sometimes called a credo or a values statement, that sets down the principles of ethical behavior expected of personnel in various situations.
Difficulty: 1 Easy
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
31) A(n) ________ makes clear that the company expects all of its personnel to recognize the ethical expectations of corporate policies and actions.
- A) articles of organization
- B) regulation
- C) articles of incorporation
- D) code of ethics
Answer: D
Explanation: A code of ethics makes clear that the company expects its personnel to recognize the ethical dimensions of corporate policies and actions.
Difficulty: 1 Easy
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
32) Some firms or industries have established a code of ethics, sometimes called a credo. The objective of a code of ethics is to:
- A) establish guidelines in dealing with suppliers.
- B) define the corporate tax rate that the corporation will be subject to.
- C) specify the principles of ethical behavior expected of its employees.
- D) establish rules for management to follow in dealing with employee grievances.
Answer: C
Explanation: A code of ethics is a set of rules that a company or other group adopts to express principles of ethical behavior that are expected from all of its personnel.
Difficulty: 1 Easy
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
33) The U.S. Office of Government Ethics is concerned with all of the following topics, except:
- A) conflicting financial interests.
- B) consumer protection.
- C) financial disclosure.
- D) misuse of position.
Answer: B
Explanation: The U.S. Office of Government Ethics is concerned with the following topics: conflicting financial interests, misuse of position, financial disclosure, and impartiality in performing official duties.
Difficulty: 2 Medium
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
34) Incentives for corporations to act more ethically and reduce their legal liability are provided by the:
- A) Uniform Commercial Code.
- B) Foreign Corrupt Practices Act.
- C) Federal Sentencing Guidelines.
- D) Federal Indictments Act.
Answer: C
Explanation: The Federal Sentencing Guidelines provide an incentive for corporations to act more ethically.
Difficulty: 1 Easy
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
35) American firms are prohibited from bribing foreign officials under the:
- A) Federal Indictments Act.
- B) Foreign Corrupt Practices Act.
- C) Federal Sentencing Guidelines.
- D) Uniform Commercial Code (UCC).
Answer: B
Explanation: The Foreign Corrupt Practices Act prohibits American firms from bribing foreign officials.
Difficulty: 1 Easy
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
36) All of the following are examples of self-regulatory standards of conduct created by trade associations, EXCEPT:
- A) telephone marketing.
- B) sweepstakes.
- C) marketing to children.
- D) billboard marketing.
Answer: D
Explanation: The Direct Marketing Association (DMA) provides self-regulatory standards of conduct for some of the following activities: telephone marketing, sweepstakes, fund-raising, marketing to children, and the collection and use of marketing data.
Difficulty: 2 Medium
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
37) The threat of legal prosecution and penalties against a corporation or employee:
- A) creates a basis to withhold information from shareholders or owners.
- B) helps to eliminate all unethical corporate practices.
- C) has caused an increase in unethical practices.
- D) does not eliminate all unethical corporate practices.
Answer: D
Explanation: The threat of legal prosecution and penalties does not eliminate all unethical practices.
Difficulty: 1 Easy
Topic: Ways to Ensure Ethical Practices
Learning Objective: 02-05 Discuss some ways businesses can ensure ethical practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
38) Sometimes, the driving force for ethics reform of a corporation may be a(n):
- A) ethics guru.
- B) master salesperson.
- C) shareholder or owner of a corporation.
- D) whistleblower.
Answer: D
Explanation: The threat of legal prosecution and penalties does not eliminate all unethical practices. Sometimes the driving force for reform may be the individual whistleblower.
Difficulty: 1 Easy
Topic: Ways to Ensure Ethical Practices
Learning Objective: 02-05 Discuss some ways businesses can ensure ethical practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
39) A person who reveals to a governmental authority, or to news media, information regarding some illegal wrongdoing or conduct that he or she regards as unethical is called a(n):
- A) ethics guru.
- B) whistleblower.
- C) quality assuror.
- D) shareholder.
Answer: B
Explanation: A whistleblower is a person who reveals to a governmental authority, or to news media, confidential information concerning some wrongdoing or conduct that he or she regards as unethical and/or illegal.
Difficulty: 1 Easy
Topic: Ways to Ensure Ethical Practices
Learning Objective: 02-05 Discuss some ways businesses can ensure ethical practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
40) Being a whistleblower is difficult and may require an individual to be confronted with an ethical ________ when considering reporting things.
- A) statute
- B) regulation
- C) dilemma
- D) quantum
Answer: C
Explanation: The whistleblower, too, may be confronted with an ethical dilemma. Often the choice is between remaining silent or revealing information that could result in adverse effects on the firm that may cause many coworkers to lose their jobs.
Difficulty: 1 Easy
Topic: Ways to Ensure Ethical Practices
Learning Objective: 02-05 Discuss some ways businesses can ensure ethical practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
41) The federal government and many states have statutes that protect whistleblowers from:
- A) profiting.
- B) retaliation.
- C) appraisal.
- D) indictments.
Answer: B
Explanation: The federal government and many states have statutes that protect whistleblowers from retaliation.
Difficulty: 1 Easy
Topic: Ways to Ensure Ethical Practices
Learning Objective: 02-05 Discuss some ways businesses can ensure ethical practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
42) The usual motivation behind an individual becoming a whistleblower is the outrage to a person’s sense of:
- A) knowledge.
- B) self-esteem.
- C) ethics.
- D) confidence.
Answer: C
Explanation: With the possible exception of certain individuals who may have a personal grudge, the usual motivation behind whistleblowing is the outrage to a person’s sense of ethics.
Difficulty: 1 Easy
Topic: Ways to Ensure Ethical Practices
Learning Objective: 02-05 Discuss some ways businesses can ensure ethical practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
43) Ethical beliefs are the foundation of many of our government’s:
- A) laws.
- B) reports.
- C) books.
- D) religious practices.
Answer: A
Explanation: Ethical principles have been the foundation of many of our laws.
Difficulty: 1 Easy
Topic: The Relationship Between Law and Ethics
Learning Objective: 02-03 Discuss the relationship between law and ethics.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
44) Explain what the term whistleblower means. Give an example of a federal agency that has created incentives for whistleblowers.
Answer: A whistleblower is a person who reveals to a governmental authority, or to news media, confidential information concerning some wrongdoing or conduct that he or she regards as unethical and/or illegal. The information may have come to him or her in the course of employment or in other ways. The Securities and Exchange Commission (“SEC”) and the Internal Revenue Service (“IRS”) have programs to reward the reporting of illegal activities.
Difficulty: 2 Medium
Topic: Ways to Ensure Ethical Practices
Learning Objective: 02-05 Discuss some ways businesses can ensure ethical practices.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
45) YumBurger is an example of a corporation that dealt with a particular ethical issue, livable wages for its employees, and despite a legal mandate from the government, took what action?
Answer: YumBurger was required under the law to pay a minimum wage. After ethical consideration YumBurger chose to pay their workers more since they considered that the legal mandate did not solve the ethical problem.
Difficulty: 2 Medium
Topic: The Relationship Between Law and Ethics
Learning Objective: 02-03 Discuss the relationship between law and ethics.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
46) Companies establish ethical compliance by doing what?
Answer: Firms or industries establish a code of ethics, sometimes called a credo, that sets down the principles of ethical behavior expected of its personnel in various situations.
Difficulty: 2 Medium
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
47) What is the importance of the Federal Sentencing Guidelines?
Answer: The Federal Sentencing Guidelines provide an incentive for corporations to act more ethically. Under this mandate, when an employee violates a law in the course of his or her employment, a firm can reduce its possible liability if it can show that it took action to develop moral guidelines for its employees.
Difficulty: 2 Medium
Topic: Responses to Ethical Issues
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Understand
AACSB: Ethics
Accessibility: Keyboard Navigation
48) What are the basic functions of the U.S. Office of Government Ethics?
Answer: The U.S. Office of Government Ethics is concerned with conflicting financial interests, misuse of position, financial disclosure, impartiality in performing official duties, and other areas of concern.
Explanation: The U.S. Office of Government Ethics is a federal agency that oversees ethics within the corporate world, including misuse of position and proper financial disclosures.
Difficulty: 1 Easy
Topic: Ethical Reasoning and Responses
Learning Objective: 02-04 Discuss the different types of ethical reasoning and provide examples of responses to ethical issues by business firms, educational institutions, governments, and trade and professional associations.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
49) What are some non-legal penalties experienced by firms that engage in unethical practices?
Answer: Results may include unfavorable public relations, loss of consumer goodwill and confidence, and poor employee morale.
Explanation: Results of engaging in unethical behavior by a corporation may include unfavorable public relations, loss of consumer goodwill and confidence, and poor employee morale.
Difficulty: 1 Easy
Topic: Ways to Ensure Ethical Practices
Learning Objective: 02-05 Discuss some ways businesses can ensure ethical practices.
Bloom’s: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
Essentials of Business Law, 10e (Liuzzo)
Chapter 4 Tort Law
1) A tort is a violation of the rights of an identifiable individual or business that has been wronged by an intentional act, not by negligence.
Answer: FALSE
Explanation: A tort is an intentional or negligent violation of a right.
Difficulty: 1 Easy
Topic: The Nature of Torts
Learning Objective: 04-01 Explain the nature of torts and identify some common torts.
Bloom’s: Remember
AACSB: Knowledge Application
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2) The law of torts does not include duties imposed by contract but rather is concerned with the violation of private rights.
Answer: TRUE
Explanation: The law of torts does not deal with duties imposed by contract but is concerned only with the violation of private rights.
Difficulty: 1 Easy
Topic: The Nature of Torts
Learning Objective: 04-01 Explain the nature of torts and identify some common torts.
Bloom’s: Remember
AACSB: Knowledge Application
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3) Defamation is the harming of a person’s reputation and good name by the communication of a false statement.
Answer: TRUE
Explanation: Defamation is the harming of a person’s reputation and good name by the communication of a false statement.
Difficulty: 1 Easy
Topic: Defamation
Learning Objective: 04-02 Describe defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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4) For an act to be considered defamatory, it is necessary to show that the statement was harmless and made in such a way that others could not hear or read it.
Answer: FALSE
Explanation: A defamatory statement requires a showing that the harmful statement was made in such a way that others heard or read it.
Difficulty: 1 Easy
Topic: Defamation
Learning Objective: 04-02 Describe defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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5) Libel is the spreading of damaging statements in oral form—including pictures, cartoons, effigies, and defamation on radio, television, and websites.
Answer: FALSE
Explanation: Libel is the spreading of damaging statements in written form—including pictures, cartoons, and effigies (likenesses). Defamation on radio, television, and websites is also considered libel.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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6) Fraud is the spreading of damaging words or ideas about a person, directly or indirectly, in all other forms not considered libel.
Answer: FALSE
Explanation: Slander is the spreading of damaging words or ideas about a person, directly or indirectly, in all other forms not considered libel.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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7) The tort of slander requires a direct defamatory statement towards the injured party.
Answer: FALSE
Explanation: The tort of slander does not require a directly defamatory statement. Gestures and actions can sometimes be slanderous.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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8) Certain individuals have special privileges that allow them to make any statements without being accused of defamation.
Answer: TRUE
Explanation: If a person, such as an attorney in a court proceeding who accuses a witness of lying, is accused of defamation but had a special privilege in making the defamatory statement, the person alleging defamation cannot recover damages.
Difficulty: 1 Easy
Topic: Defenses to Defamation
Learning Objective: 04-04 Explain the two common defenses to charges of defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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9) If a defamatory statement can be proved to be true, the person who claims that he or she was defamed can recover damages.
Answer: FALSE
Explanation: If a defamatory statement can be proved to be true, the person who claims that he or she was defamed cannot recover damages.
Difficulty: 1 Easy
Topic: Defenses to Defamation
Learning Objective: 04-04 Explain the two common defenses to charges of defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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10) A public nuisance affects only single individuals.
Answer: FALSE
Explanation: A public nuisance affects the community or the general public.
Difficulty: 1 Easy
Topic: Nuisance
Learning Objective: 04-05 Define nuisance and the types of nuisance charges.
Bloom’s: Remember
AACSB: Knowledge Application
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11) A person can be charged with creating a public nuisance by causing loud noises, creating foul odors, shining bright lights, or diverting a stream.
Answer: TRUE
Explanation: A person can be charged with creating a private nuisance by causing loud noises, creating foul odors, shining bright lights, or diverting a stream.
Difficulty: 1 Easy
Topic: Nuisance
Learning Objective: 04-05 Define nuisance and the types of nuisance charges.
Bloom’s: Analyze
AACSB: Knowledge Application
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12) A nuisance entails the complete taking of another’s property.
Answer: FALSE
Explanation: Creating a nuisance does not mean taking another’s property—only detracting from the enjoyment of the property.
Difficulty: 1 Easy
Topic: Nuisance
Learning Objective: 04-05 Define nuisance and the types of nuisance charges.
Bloom’s: Analyze
AACSB: Knowledge Application
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13) Conversion involves removal, damage, destruction, or unauthorized use of another person’s property.
Answer: TRUE
Explanation: Conversion may involve removal, damage, destruction, or unauthorized use of another person’s property.
Difficulty: 1 Easy
Topic: Conversion
Learning Objective: 04-06 Describe conversion and explain its main purpose.
Bloom’s: Remember
AACSB: Knowledge Application
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14) Vicarious negligence is the charging of a negligent act of one person onto another.
Answer: TRUE
Explanation: Vicarious negligence means charging a negligent act of one person to another.
Difficulty: 1 Easy
Topic: Negligence
Learning Objective: 04-07 Define negligence and distinguish between the different types of negligence.
Bloom’s: Remember
AACSB: Knowledge Application
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15) Under the doctrine of contributory negligence, injured parties are prevented from recovering damages if they were partly at fault for the injury.
Answer: TRUE
Explanation: Under the doctrine of contributory negligence, the injured party would not be able to sue successfully if he or she were partly responsible, even in a minor way, for the injury.
Difficulty: 1 Easy
Topic: Negligence
Learning Objective: 04-07 Define negligence and distinguish between the different types of negligence.
Bloom’s: Remember
AACSB: Knowledge Application
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16) Under the doctrine of comparative negligence, an injured party bringing a lawsuit is not prevented from recovering damages if the injured party was partly at fault.
Answer: TRUE
Explanation: Comparative negligence is a form of negligence that requires the court to assign damages according to the degree of fault of each party.
Difficulty: 1 Easy
Topic: Negligence
Learning Objective: 04-07 Define negligence and distinguish between the different types of negligence.
Bloom’s: Remember
AACSB: Knowledge Application
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17) Under a doctrine known as strict liability, people may be liable for injuries to others whether or not they have done something wrong.
Answer: TRUE
Explanation: Under the doctrine of strict liability, persons may be liable for injuries to others whether or not they have been negligent or committed an intentional tort. This is liability without the necessity of proving fault.
Difficulty: 1 Easy
Topic: Liability
Learning Objective: 04-08 Explain the legal concept of liability and provide examples.
Bloom’s: Remember
AACSB: Knowledge Application
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18) Negligence per se occurs when a defendant, in a case of negligence, has violated a law that was enacted in order to prevent the type of injury that occurred.
Answer: TRUE
Explanation: Negligence per se, which translates to “negligence in or of itself,” occurs when a defendant in a case of negligence has violated a law that was enacted in order to prevent the type of injury that occurred.
Difficulty: 1 Easy
Topic: Negligence
Learning Objective: 04-07 Define negligence and distinguish between the different types of negligence.
Bloom’s: Remember
AACSB: Knowledge Application
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19) Defamation, nuisance, conversion, and negligence are various kinds of:
- A) administrative actions.
- B) criminal offenses.
- C) common torts.
- D) commerce factors.
Answer: C
Explanation: Defamation, nuisance, conversion, and negligence are various kinds of common torts.
Difficulty: 1 Easy
Topic: The Nature of Torts
Learning Objective: 04-01 Explain the nature of torts and identify some common torts.
Bloom’s: Remember
AACSB: Knowledge Application
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20) The law of torts deals with violations of rights to:
- A) a contract.
- B) an identifiable individual or business.
- C) a divorcing party.
- D) a trademark infringement.
Answer: B
Explanation: A tort is a violation of the rights of an identifiable individual or business.
Difficulty: 1 Easy
Topic: The Nature of Torts
Learning Objective: 04-01 Explain the nature of torts and identify some common torts.
Bloom’s: Remember
AACSB: Knowledge Application
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21) To call someone a thief to the person’s face may amount to:
- A) defamation.
- B) insult.
- C) nuisance.
- D) negligence.
Answer: B
Explanation: To call someone a thief to the person’s face may be an insult, but it is not defamation. If the statement is heard by someone then it may be defamation.
Difficulty: 1 Easy
Topic: Defamation
Learning Objective: 04-02 Describe defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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22) The tort of defamation includes which of the following?
- A) false imprisonment
- B) libel
- C) patent infringement
- D) all of the above
Answer: B
Explanation: The charge of defamation has been separated into two torts: libel and slander.
Difficulty: 1 Easy
Topic: Defamation
Learning Objective: 04-02 Describe defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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23) Defamation is a broad term that includes both:
- A) libel and slander.
- B) libel and conversion.
- C) nuisance and libel.
- D) grand and petty larceny.
Answer: A
Explanation: The charge of defamation has been separated into two torts: libel and slander.
Difficulty: 1 Easy
Topic: Defamation
Learning Objective: 04-02 Describe defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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24) Defamation requires that a false statement be communicated to ________.
- A) the injured party.
- B) a person’s private diary.
- C) no one.
- D) a third party.
Answer: D
Explanation: For a statement to be defamatory, it must be addressed to a third party.
Difficulty: 1 Easy
Topic: Defamation
Learning Objective: 04-02 Describe defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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25) The most common form of slander involves:
- A) physical assault.
- B) spoken words.
- C) forgery.
- D) cartoons.
Answer: B
Explanation: The most common form of slander involves spoken words, but slander also can be committed by means of gestures and actions.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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26) The tort of slander:
- A) is limited to only spoken words.
- B) is limited to only written words.
- C) is limited to words spoken in anger.
- D) includes spoken words and gestures.
Answer: D
Explanation: The most common form of slander involves spoken words, but slander also can be committed by means of gestures and actions.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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27) The spreading of damaging statements in written form is known as:
- A) slander.
- B) libel.
- C) negligence.
- D) false imprisonment.
Answer: B
Explanation: Libel is the spreading of damaging statements in written form—including pictures, cartoons, and effigies (likenesses). Defamation on radio, television, and websites is also considered libel.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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28) Libel typically exists in all the following except:
- A) speeches.
- B) books.
- C) newspapers.
- D) business and personal letters.
Answer: A
Explanation: Although many libel cases involve defamatory statements published in books, newspapers, magazines, and on websites, the possibility of libel also exists in business and personal letters, memos, and catalogs.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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29) Most cases of slander involve thoughtless statements that affect another person’s:
- A) commercial investments.
- B) property.
- C) reputation.
- D) nationality.
Answer: C
Explanation: Most cases of slander involve thoughtless statements that reflect on another person’s good name and reputation.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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30) The tort of slander is the spreading of damaging words or ideas about a person, directly or indirectly, in all other forms not considered ________.
- A) defamation
- B) libel
- C) an intentional tort
- D) negligence
Answer: B
Explanation: The tort of slander is the spreading of damaging words or ideas about a person, directly or indirectly, in all other forms not considered libel.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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31) In conducting business, a firm and its owners have the right not to be subjected to:
- A) politically correct statements.
- B) truthful statements.
- C) commercially disadvantaged statements.
- D) false and malicious statements.
Answer: D
Explanation: In conducting business, a firm and its owners have the right to remain free from false and malicious statements by others that may cause a loss or damage to the reputation of the firm, the owners, the products produced, or the merchandise carried or manufactured by the firm.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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32) The tort of trade libel is similar to:
- A) scandal.
- B) defamation.
- C) vicarious liability.
- D) patent infringement.
Answer: B
Explanation: The tort of trade libel is similar to traditional defamation but deals with an individual’s title to property or to the quality or conduct of a business.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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33) The tort of trade libel deals with:
- A) a firm’s incorporation documents.
- B) the quality of a firm’s research activities.
- C) spoken defamation of a company.
- D) an individual’s title to property.
Answer: D
Explanation: The tort of trade libel is similar to traditional defamation but deals with an individual’s title to property or to the quality or conduct of a business.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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34) The common defenses to charges of defamation are:
- A) insanity and privilege.
- B) truth and falsehood.
- C) truth and privilege.
- D) privilege and falsehood.
Answer: C
Explanation: There are two common defenses to charges of defamation: (1) truth and (2) privilege.
Difficulty: 1 Easy
Topic: Defenses to Defamation
Learning Objective: 04-04 Explain the two common defenses to charges of defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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35) If the person accused of ________ had a special privilege, such as an attorney in a court proceeding who accuses a witness of lying, then the complainant cannot recover damages.
- A) larceny
- B) false imprisonment
- C) defamation
- D) negligence
Answer: C
Explanation: If the person accused of defamation had a special privilege in making the defamatory statement, such as an attorney in a court proceeding who accuses a witness of lying, the person who claims he or she was defamed cannot recover damages.
Difficulty: 1 Easy
Topic: Defenses to Defamation
Learning Objective: 04-04 Explain the two common defenses to charges of defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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36) If the person accused of defamation had a special privilege in making the defamatory statement, such as an attorney in a court proceeding who accuses a witness of lying, the person who claims he or she was defamed:
- A) can recover treble damages.
- B) can recover special damages.
- C) cannot recover damages.
- D) can make defamatory statements against the attorney.
Answer: C
Explanation: If the person accused of defamation had a special privilege in making the defamatory statement, such as an attorney in a court proceeding who accuses a witness of lying, the person who claims he or she was defamed cannot recover damages.
Difficulty: 1 Easy
Topic: Defenses to Defamation
Learning Objective: 04-04 Explain the two common defenses to charges of defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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37) An example of an individual who has a special privilege against a charge of defamation is a(n) ________.
- A) attorney.
- B) mailman.
- C) lunch lady.
- D) school teacher.
Answer: A
Explanation: If the person accused of defamation had a special privilege in making the defamatory statement, such as an attorney in a court proceeding who accuses a witness of lying, the defamed person cannot recover damages.
Difficulty: 1 Easy
Topic: Defenses to Defamation
Learning Objective: 04-04 Explain the two common defenses to charges of defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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38) A person who acts in a way that denies another the right to enjoy his or her property without unreasonable interference is liable under:
- A) government nuisance.
- B) public nuisance.
- C) defamatory tort.
- D) private nuisance.
Answer: D
Explanation: A person who acts in a way that denies a person the right to enjoy his or her property without unreasonable interference has created a private nuisance.
Difficulty: 1 Easy
Topic: Nuisance
Learning Objective: 04-05 Define nuisance and the types of nuisance charges.
Bloom’s: Remember
AACSB: Knowledge Application
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39) The interference of the public’s enjoyment of life or property is called a(n) ________.
- A) public nuisance
- B) corporate nuisance
- C) international nuisance
- D) private nuisance
Answer: A
Explanation: A person who acts in a way that denies a person the right to enjoy his or her property without unreasonable interference has created a private nuisance. A public nuisance, by comparison, affects the community or the general public.
Difficulty: 1 Easy
Topic: Nuisance
Learning Objective: 04-05 Define nuisance and the types of nuisance charges.
Bloom’s: Remember
AACSB: Knowledge Application
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40) A person who has wrongfully taken, detained, or illegally assumed ownership of the personal property of another has committed the tort of:
- A) libel.
- B) defamation.
- C) slander.
- D) conversion.
Answer: D
Explanation: The law gives each person the right to own and use personal property without interference from others. When this right is denied or abridged by another, the wrongdoer is said to have committed the tort of conversion. This tort can involve a wrongful taking, a wrongful detention, or an illegal assumption of ownership.
Difficulty: 1 Easy
Topic: Conversion
Learning Objective: 04-06 Describe conversion and explain its main purpose.
Bloom’s: Remember
AACSB: Knowledge Application
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41) The law gives each person the right to own and use personal property without interference from others. When this right is denied or abridged by another, the wrongdoer is said to have committed the tort of:
- A) nuisance.
- B) scandal.
- C) libel.
- D) conversion.
Answer: D
Explanation: The law gives each person the right to own and use personal property without interference from others. When this right is denied or abridged by another, the wrongdoer is said to have committed the tort of conversion.
Difficulty: 1 Easy
Topic: Conversion
Learning Objective: 04-06 Describe conversion and explain its main purpose.
Bloom’s: Remember
AACSB: Knowledge Application
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42) An action for the tort of conversion is one way to:
- A) award punitive damages.
- B) attach private property.
- C) notify the government of wrongdoing.
- D) replace money or property that has been stolen or inadvertently taken.
Answer: D
Explanation: A lawsuit charging a person with conversion provides the victim with the means of collecting money damages from someone who steals personal property.
Difficulty: 1 Easy
Topic: Conversion
Learning Objective: 04-06 Describe conversion and explain its main purpose.
Bloom’s: Remember
AACSB: Knowledge Application
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43) A term that is used in cases involving the negligence of professionals is:
- A) false imprisonment.
- B) vis major.
- C) malpractice.
- D) incorporation.
Answer: D
Explanation: Lawsuits have charged professionals such as doctors, dentists, nurses, pharmacists, lawyers, and accountants with malpractice (a term that is used in cases involving the negligence of professionals).
Difficulty: 1 Easy
Topic: Negligence
Learning Objective: 04-07 Define negligence and distinguish between the different types of negligence.
Bloom’s: Remember
AACSB: Knowledge Application
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44) To avoid legal action either as an individual or as an employee, each person must exercise reasonable care and good judgment to avoid:
- A) causing injury to others.
- B) curtailing others’ rights.
- C) breaching duties.
- D) payment of compensation.
Answer: A
Explanation: To avoid legal action either as an individual or as an employee, each person must exercise reasonable care and good judgment to avoid causing injury to others.
Difficulty: 1 Easy
Topic: Negligence
Learning Objective: 04-07 Define negligence and distinguish between the different types of negligence.
Bloom’s: Remember
AACSB: Knowledge Application
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45) The failure to exercise the necessary care not to expose others to unreasonable risk of harm is the tort of:
- A) negligence.
- B) defamation.
- C) battery.
- D) assault.
Answer: A
Explanation: The tort of negligence is the failure to exercise reasonable care necessary to protect others from risk of harm.
Difficulty: 1 Easy
Topic: Negligence
Learning Objective: 04-07 Define negligence and distinguish between the different types of negligence.
Bloom’s: Remember
AACSB: Knowledge Application
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46) A completely fictitious individual who is assumed to have the “judgment and skill” one would expect from a person with the strengths and limitations of the person whose behavior is being judged is:
- A) a person with a criminal background.
- B) a person with a legal background.
- C) a person of ordinary prudence.
- D) a person with a high IQ.
Answer: C
Explanation: Under the doctrine of the “reasonable person of ordinary prudence” a completely fictitious individual is assumed to have the judgment and skill one would expect from a person with the strengths and limitations of the person whose behavior is being judged.
Difficulty: 1 Easy
Topic: Negligence
Learning Objective: 04-07 Define negligence and distinguish between the different types of negligence.
Bloom’s: Remember
AACSB: Knowledge Application
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47) Contributory negligence is ________ the party who is charged with negligence.
- A) an intentional act by
- B) a legal defense of
- C) a defamatory act by
- D) an admission of guilt by
Answer: B
Explanation: Contributory negligence is not an accusation but rather a legal defense of the party who is charged with negligence.
Difficulty: 1 Easy
Topic: Negligence
Learning Objective: 04-07 Define negligence and distinguish between the different types of negligence.
Bloom’s: Remember
AACSB: Knowledge Application
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48) In most cases who will determine if a defendant is liable for damages in a case?
- A) a court
- B) a state legislature
- C) the Congress
- D) the President of the Better Business Bureau
Answer: A
Explanation: In most lawsuits, the court must decide if the defendant is liable for the damages as charged.
Difficulty: 1 Easy
Topic: Liability
Learning Objective: 04-08 Explain the legal concept of liability and provide examples.
Bloom’s: Remember
AACSB: Knowledge Application
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49) Describe “defamation,” including how it relates to libel and slander, and what constitutes a defamatory act.
Answer: Defamation is the harming of a person’s reputation and good name by the communication of a false statement. For an act to be considered defamatory, it is necessary to show that the statement was made in such a way that others could hear or read it. Defamation may be further categorized into libel and slander. Libel is the written form, while slander is all other forms not considered libel.
Difficulty: 1 Easy
Topic: Defamation
Learning Objective: 04-02 Describe defamation.
Bloom’s: Remember
AACSB: Knowledge Application
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50) Explain the kinds of actions that can be slanderous.
Answer: Slander is the spreading of damaging words or ideas about a person, directly or indirectly, in all other forms not considered libel. Slander includes spoken words, gestures, actions, and even omissions.
Explanation: Spoken words, gestures or actions that cause harm by an insinuation that holds a person up to hatred, ridicule, or contempt, or lowers a person’s esteem, respect, or social position, can be deemed slanderous.
Difficulty: 1 Easy
Topic: Libel and Slander
Learning Objective: 04-03 Explain the differences between libel and slander.
Bloom’s: Remember
AACSB: Knowledge Application
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51) Explain the phrase “reasonable person.”
Answer: Under the doctrine of the “reasonable person of ordinary prudence” a completely fictitious individual is assumed to have the judgment and skill one would expect from a person with the strengths and limitations of the person whose behavior is being judged.
Explanation: The law provides certain ways by which juries can determine if a person has acted negligently. One of these ways is the doctrine of the “reasonable person of ordinary prudence,” a completely fictitious individual who is assumed to have the judgment and skill one would expect from a person with the strengths and limitations of the person whose behavior is being judged. While there is no standard reasonable person, a jury is asked to determine how the mythical person would have behaved under the same or similar circumstances. Obviously, one reason the law has kept this imaginary individual alive is to prevent jurors from judging a defendant in terms of how they themselves would have behaved.
Difficulty: 1 Easy
Topic: Negligence
Learning Objective: 04-07 Define negligence and distinguish between the different types of negligence.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
52) The law gives everyone the right to enjoy his or her land without unreasonable interference from others. What tort would be applicable if that right is denied?
Answer: The law gives each person the right to own and use personal property without interference from others. When this right is denied or abridged by another, the wrongdoer is said to have committed the tort of conversion.
Explanation: The law gives each person the right to own and use personal property without interference from others. When this right is denied or abridged by another, the wrongdoer is said to have committed the tort of conversion.
Difficulty: 1 Easy
Topic: Conversion
Learning Objective: 04-06 Describe conversion and explain its main purpose.
Bloom’s: Remember
AACSB: Knowledge Application
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53) Describe the term “negligence” as it applies to the law of torts.
Answer: Negligence is the failure to exercise necessary care to protect others from unreasonable risk of harm.
Explanation: Negligence is the failure to exercise necessary care to protect others from unreasonable risk of harm. Vicarious negligence charges a negligent act of one person to another. Comparative negligence apportions the risk between the parties, and contributory negligence is a legal defense of the person alleged to have been negligent. Negligence per se translates to “negligence in or of itself” and occurs when a defendant in a case of negligence has violated a law that was enacted in order to prevent the type of injury that occurred.
Difficulty: 1 Easy
Topic: Negligence
Learning Objective: 04-07 Define negligence and distinguish between the different types of negligence.
Bloom’s: Understand
AACSB: Knowledge Application
Accessibility: Keyboard Navigation
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