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Distributive Justice Theory and other in 17 multiple choice

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1) Peter runs an auto air conditioning repair shop, because of the phase-out of the ozone-depleting refrigerants used in older auto air conditioners, auto air repairers have become subject to numerous new laws and regulation, some of which are costly and burdensome with which to comply. Although it cost him more, Peter decides to follow all the statutes and regulation so long as everyone else does the same. Peter has reached his decision in accordance with:
A) ethical relativism
B) utilitarianism
C)ethical fundamentalism
D) Kantian ethics
E) Rawls distributive justice theory

2) Henry purchase an insurance policy under which he pays annual premium for his entire life, but ending at age 65. If he pays all the premiums then he is covered for his entire life , and can receive a fixed amount of cash monthly for the remainder of life after 65. What type of policy is that
A) Term life
B) Whole life
C) An annuity
D) Indemnity life
E) Universal life

3) Which of the theories of the social responsibility of business includes obligations of a business to parties other than shareholders?
A) Corporate citizenship only
B) Moral minimum and stakeholder interest
C) Stakeholder interest only
D) Stakeholder interest and corporate citizenship
E) Moral minimum, stakeholder interest, and maximizing profits

4) Which of the following is true when someone accidentally makes an improvement to the personal property of another where the owner was unaware of the improvement until after it had been made?
A) The property owner gets to keep the improvement in all cases, but must pay the party who improved it the reasonable value of the improvement.
B) The party who made the improvement can remove it if this is possible, otherwise the owner of the property gets to keep the improvement and is not required to pay for it.
C) The property owner gets to keep the improvement in all circumstances and is not required to pay for it.
D) The party who made the improvement can remove it if this is possible, otherwise the owner of the property gets to keep the improvement and must pay the party who improved it the reasonable value of the improvement.

5) The procedure that an accountant performs to determine whether the financial statements of a business are materially accurate is a(n):
A) review.
B) verification.
C) audit.
D) compilation.
E) account sampling.

6) What is the difference between an administrator and an executor?
A) Administrators distribute real property and executors distribute personal property.
B) Administrators administer trusts and executors administer wills.
C) Administrators are used for per capita distributions and executers are used for per stirpes distributions.
D) Administrators are appointed by the court and executors are named in the will.
E) Executors are used where the decedent has surviving children under age 18 and administrators are used where the decedent has no surviving children under age 18.

7) Can the holder of a life estate mortgage his life estate?
A) No, because of the uncertainty over how long the interest will last.
B) Yes, so long as the mortgage term is limited to the length of the life estate.
C) Yes, but only if the holder of the remainder interest or reversion also simultaneously mortgages that interest.
D) No, because a life estate is not real property.
E) Yes, with the only restrictions being those applicable to a mortgage of a fee simple interest.

8) The holder of a life estate can do all of the following with her life estate except:
A) give it away.
B) leave it to someone in her will.
C) sell it.
D) mortgage it.
E) lease it to another.

9) Father transfers realty to his three children as tenants in common. This means that:
A) the children own the property with rights of survivorship.
B) each child owns a life estate; reversion to father.
C) only on child may possess that property at any one time.
D) each child has an undivided one-third interest in the entire property.
E) each child owns a specific one-third of that property.

10) The theory of business social responsibility that holds that a business owes duties solely to produce the highest return for its shareholders is:
A) the social audit theory.
B) the corporate citizenship theory.
C) the maximizing profits theory.
D) the moral minimum theory.
E) the stakeholder interest theory.

11) Mark owns a lot where he would like to build a duplex, but the zoning ordinance only allows single-family homes. Mark believes that he should be able to build a duplex because his lot is larger than most in the neighborhood. In addition, Mark's land is worth less if only a single-family home can be built on it. Mark can:
A) apply for a variance that would allow him to build contrary to the zoning regulations.
B) build the structure because it would not impose an undue hardship on the neighborhood and then apply for a special use permit once it was completed.
C) sue the city on the grounds that the ordinance is a private nuisance as it applies to Mark.
D) sue the city on the grounds that the zoning ordinance amounts to a taking because it reduces the value of his land.
E) A and D.

12) Which of the following statements is true regarding the relationship of law and ethics?
A) In some cases the law will require a higher standard of conduct than ethics, but never vice versa.
B) Depending on the circumstances, the law can require a higher, lower, or the same standard of conduct as ethics demands.
C) In some cases ethics will require a higher standard of conduct than the law, but never vice versa.
D) The legal requirements will almost always be the same as the ethical requirements because the law is based on the ethical standards.

13) Under an automobile insurance policy, what does comprehensive coverage protect against?
A) All types of damage to the covered vehicles of the insured.
B) Coverage for all losses in connection with the vehicle of the insured that are caused by other parties.
C) All types of damage to the covered vehicles of the insured except for damage caused by collision.
D) All types of losses caused by the insured to other parties.
E) All types of loss in connection with the ownership and operation of a vehicle.

14) Kathy needs to drive to a city some distance away. Kathy's car is in for repairs, so Kathy borrows Gloria's car at no charge. While Kathy is driving on the highway, one of the tires comes off the car, Kathy crashes, and is seriously injured. Gloria did not know of the defect, but a reasonable inspection would have indicated that a repair was needed. Kathy sues Gloria. In this situation:
A) Gloria is not liable because this is a lease and not a bailment.
B) Gloria is not liable because she did not charge Kathy for using the car.
C) Gloria is liable because she should have discovered the defect by inspection.
D) Gloria is not liable because she did not know of the defect.
E) Gloria is liable because she is an insurer of Kathy's safety.

15) If an auditor determines that the financial statements fairly present the financial results and position of the client except for one fairly minor, but material, item that is not properly presented, the auditor would issue a(n):
A) unqualified opinion.
B) qualified opinion.
C) adverse opinion.
D) disclaimer of opinion.

16) The Foreign Corrupt Practices Act prevents each of the following except:
A) bribes to candidates for office in foreign nations.
B) bribes to foreign officials.
C) bribes to foreign political party officials.
D) bribes to foreign officials if the payment is legal under the local written laws.

17) The moral theory of ethical relativism can best be characterized by:
A) the belief that the moral rules should be determined by persons who have a "veil of ignorance" about their place or station in society.
B) the belief that a person must decide what course of action is proper based on that person's own set of beliefs or feelings.
C) the consultation of an outside source, such as a book or person, for guidance.
D) a set of universal rules based on reasoning that must be applied in all situations and is characterized by reversibility.
E) determining which course of action produces the greatest amount of good for the greatest number of people.

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Solution Summary

The solution includes 17 mutiple choice business law and ethics questions. Topics covered are the Distributive Justice Theory, the Foreign Corrupt Practices Act, moral theory of ethical relativism , relationship of law and ethics, life estates, adminstrator vs. executor

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Multiple choice questions on business law.

Give suggestions for the following law questions:
1. Which of the following statements is true?

a. If one has entered into a contract, one is obligated to fully perform one's obligations under the contract, even if it becomes impossible to do so.
b. One must perform all promises made under a contract, even if performance subsequently becomes illegal.
c. There can be contractual conditions that aren't stated expressly in a contract, but are implied by law.
d. Performance under a contract that becomes more expensive gives rise to a right to void the contract by the party who would have to bear the increased expense.

2. Which of the following statements are true?

I. The only legally recognized remedy for breach of contract is the award of money damages.
II. Courts may be called upon to determine the meaning of contract terms.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

3. All of the following statements are true, EXCEPT:

a. Contracts that increase the burden of performance of the person obligated to perform under the contract cannot be assigned.
b. Third persons, who are viewed as intended beneficiaries under a contract, have rights to sue to enforce these contracts.
c. Contracts may have conditions, which make obligations contingent on some future event.
d. Even if one party to a contract has materially breached her duty to perform under the contract, she may still recover damages from the other party if he has failed to fully perform his obligations under the contract.

4. Which of the following statements is true?

a. If a party demonstrates another party has breached a contract, and brings a lawsuit for this, the party can seek damages, but there is no other form of legal relief that may be sought by the party suffering the breach of contract.
b. A contract may specify penalties that will be due and owing if one of the parties beaches the contract, and such penalties will be enforced by the courts, even if they are much more than a reasonable approximation of the damages that will be sustained if there's a breach of contract.
c. Neither consequential nor punitive damages can be awarded in most breach of contract cases.
d. If a party agreeing to perform a personal service under a contract breaches the contract, that party may be ordered by a court to perform the service.

5. Which of the following statements are true?

I. There can be no contract without consideration.
II. Under no circumstances can a minor have any obligations arising from a contract.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

6. All of the following statements are true, EXCEPT:

a. Generally, courts will refuse to enforce contracts that involve illegal activities.
b. Generally, courts will refuse to enforce contracts that are determined to be contrary to public policy.
c. A court will not set aside a contract due to the mistake of the parties to the contract. This is true even if the mistake was made by both parties, and it affected a basic assumption upon which the contract was made that has a material effect on the agreed exchange of performances.
d. A contract will be set aside by a court if one of the parties was under duress at the time the contract was formed, or one party exercised undue influence on the other party.

7. Which of the following questions are true?

a. The stakeholder theory of corporate responsibility asserts that the corporation should act in a way that most maximizes overall profit to the corporation.
b. Deontological ethical theories provide that one's course of action should be determined by discovering which choice maximizes the total benefits to society, regardless of whether the decision itself is just or moral.
c. One major problem of rights theories of ethical decision making is the difficulty of reaching agreement on the rights that must be protected.
d. The ethical theory of profit maximization is highly concerned with the distribution of wealth throughout society.

8. Which of the following statements are true?

I. Contracts with people who lack capacity to enter into contracts are voidable by the party lacking capacity.
II. If one makes a contract with a minor and provides "necessaries" to the minor under the contract, the minor may disaffirm the contract, and the party providing the necessaries is not entitled to recover anything under any legal theory of recovery.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

9. All of the following statements are true, EXCEPT:

a. Historically, corporate boards of directors have provided close supervision of the actions of corporate officers.
b. The Sarbanes-Oxley Act of 2002 requires public companies to have board audit committees comprising only independent directors.
c. Increasing the information and resources of members of the board of directors of a corporation would help facilitate greater accountability on the part of corporate management.
d. The Sarbanes-Oxley Act of 2002 has a provision by which fraudulently obtained stock option profits may be recovered by companies.

10. Which of the following statements is true?

a. Analogies provide conclusive proof for the wisdom of taking an action on behalf of one corporation due to the success of the same action in another.
b. The logical fallacy of begging the question involves appealing to the board of directors to overrule actions of corporate officers, and to make certain key business decisions on its own.
c. The gambler's fallacy is encountered only if a corporate officer makes a highly risky decision that is inconsistent with the overall risk profile of the individual corporation.
d. A corporate officer who justifies spending additional money on a certain project in an attempt to recover money already spent and used up is likely guilty of committing the sunk cost fallacy.

11. Which of the following statements are true?

I. In a lawsuit concerning a written contract, the parol evidence rule forbids the introduction of any evidence other than the contract itself, in all situations.
II. The overall goal of interpreting the meaning of a contract or its terms is to ascribe the meaning that a reasonable person would be expected to give to the term or matter at issue.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

12. All of the following statements are true, EXCEPT:

a. Many contracts contain express conditions. These are certain things that must happen before one of the parties is expected to perform his obligations under the contract.
b. Under a contract for the construction of a building, if the builder only substantially performs, but doesn't completely perform, his contractual obligations, the other party has no further obligations under the contract whatsoever.
c. If one party to a contract makes it clear by word or act he won't perform his obligations under a valid contract, this constitutes a breach of contract by anticipatory repudiation.
d. If a party can't perform under a contract due to certain circumstances, or it becomes economically unfeasible to do so, performance under the contract may be excused, under certain conditions.

13. Which of the following statements are true?

I. The protection against compulsory self-incrimination applies to individuals, partnerships and corporations. Thus, individuals who are custodians of corporate records may refuse to produce corporate records that may tend to implicate them personally.
II. The double jeopardy clause protects against more than one criminal proceeding being brought against someone by the government for the same offense, but doesn't prohibit a civil proceeding that is instituted after the conclusion of a criminal proceeding.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

14. Which of the following statements are true?

a. It is not necessary to enact a statute to make an act a crime. There are common law crimes, which consist of offenses that are derived from legal principles enunciated by judges in cases brought against criminal defendants.
b. Anyone who violates a criminal statute may be convicted of a crime whether or not the defendant had the capacity to form criminal intent when the defendant committed the crime.
c. Criminal statutes do not require that criminal intent, or mens rea, be demonstrated by the prosecution.
d. A formal criminal charge may be brought either by an indictment or by an information, depending on the jurisdiction in which the charge is brought.

15. Which of the following statements are true?

I. Corporate ethics codes have generally eliminated the need for ethical training and for greater corporate focus on ethical issues.
II. Corporate ethics codes cannot impose greater obligations on employees than those imposed under the law.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

16. All of the following statements are true, EXCEPT:

a. Persons generally have no reasonable expectation of privacy in areas such as open fields or other similar areas open to the public.
b. As a general, rule, searches carried out without proper search warrants are considered unreasonable.
c. Due to the privilege against self-incrimination, no one may be compelled to provide physical evidence that may incriminate them such as fingerprints, blood, or hair samples.
d. Under the modern rule, a corporation may be held liable for criminal offenses committed by employees who acted within the scope of their employment and for the benefit of the corporation.

17. Which of the following statements are true?

a. The Foreign Corrupt Practices Act prohibits giving things of value to foreign governments to influence their official actions.
b. Under RICO, a court may assess fines and imprisonment if a defendant is convicted, but the court may not seize, or forfeit, assets derived from a criminal enterprise.
c. There is currently no legal prohibition against using a computer to defraud someone.
d. Businesses cannot be convicted of crimes. Only individuals may be convicted of crimes.

18. Which of the following statements are true?

I. The moral rights ethical approach holds that decisions must be consistent with fundamental rights and privileges, such as the right to privacy, freedom of conscience and property ownership, and that it is the duty of all to maintain the rights of others.
II. The justice principle of ethics is based on fairness and distributive justice.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

19. All of the following statements are true, EXCEPT:

a. In general, auditors, consultants and securities professionals owe their clients a duty to exercise the care and skill of the ordinary prudent professional in the same circumstances.
b. Courts determine the specific standards of ordinary prudence in each profession, and do not defer at all to those in the profession in determining what constitutes ordinary prudence in the given profession.
c. Professionals owe their clients the duty to comply with contracts the professionals have entered into with their clients.
d. Professionals may not delegate their duty to perform under a contract to someone else without the consent of their client.

20. Which of the following statements is true?

a. Securities professionals owe no obligation to make sure securities they recommend to their clients are suitable to their clients' financial circumstances.
b. In some circumstances, courts may allow professionals to defend themselves from legal liability to their clients because of their clients' contributory or comparative negligence.
c. There is no obligation of confidentiality owed by a professional to his or her clients.
d. Professionals will not be found legally responsible to persons with whom they have no contract to provide professional services.

21. Which of the following statements are true?

I. There are two elements to the professional's duty of performance: reasonable skill and reasonable care.
II. Since embezzlement is a crime requiring specific intent, accountants may not be found liable to their client's for negligently failing to uncover employee fraud or embezzlement.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

22. All of the following statements are true, EXCEPT:

a. A professional may be liable for fraud if he acts with scienter?that is he knows of the falsity of a statement, or acts in reckless disregard of the truth.
b. A professional may not disclose sensitive client matters such as income and wealth, or use secret information about a client's new product to purchase the client's securities.
c. In most cases, when the professional has committed fraud, liability of the professional may extend to persons beyond the professional's client, and will likely include all foreseeable users of the professional's work product who suffered damages proximately caused by the fraud.
d. Auditors or underwriters of securities cannot be held legally liable to purchasers of securities whether or not they are responsible for a defective registration statement.

23. Which of the following statements is true?

a. Professionals may escape all professional liability by forming a Limited Liability Company (LLC).
b. RICO is an effective criminal and civil statute that can be used against organized criminal enterprises, but it may not be applied to otherwise legitimate businesses, such as corporations.
c. The attorney-client privilege may protect a lawyer's working papers from disclosure, as well as communications between clients and their attorneys.
d. There is no accountant-client privilege recognized by statute, or otherwise.

24. Which of the following statements are true?

I. Professionals may be found legally liable for breach of contract, or for negligence.
II. Professionals owe their clients contractual duties to perform as they said they would under a contract with their clients.

a. I only
b. II only
c. Both I and II
d. Neither I nor II

25. All of the following statements are true, EXCEPT:

a. Learning about the law is fun and interesting.
b. I've learned many helpful legal rules and doctrines in this course.
c. Business persons should have a good working familiarity with key legal principles.
d. Non-attorney professionals have no need to know anything about the law?knowledge of the law is for lawyers only.

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