Question 1

A legally astute manager understands that legal analysis is often ambiguous.

Accepted Answer

Legal analysis often involves interpreting laws and legal precedents, which can involve different possible interpretations and judgments. Therefore, legal analysis can be ambiguous and subject to different interpretations.

Question 2

As used in the text,the term "legal astuteness" refers to the ability of a manager to avoid situations making consultation with legal counsel necessary.

Accepted Answer

Legal astuteness refers to the ability of a manager to recognize situations where legal counsel should be consulted and to effectively navigate legal issues.

Question 3

Private law provides the legal rules within which firms compete.

Accepted Answer

False

Question 4

A legally astute manager would wait as long as possible to consult legal counsel once a problem arises in order to keep legal fees to a minimum.

Accepted Answer

A legally astute manager would understand the importance of consulting legal counsel as soon as possible when a problem arises in order to minimize legal risks and potential liability. Waiting too long could potentially make the problem worse and increase legal fees in the long run.

Question 5

The entering into of nondisclosure agreements is an unethical practice that should not be tolerated by a legally astute manager.

Accepted Answer

Nondisclosure agreements are a common and legal practice used to protect confidential information in business transactions, employment agreements, and other situations. Therefore, it is not considered unethical for managers to enter into such agreements as long as they do not violate any laws or regulations.

Question 6

Insurance policies may help firms manage risk.

Accepted Answer

Insurance policies can provide financial protection and assistance in managing potential risks and losses for businesses.

Question 7

Self-regulation within the advertising industry has been largely successful in reducing the number of fast-food commercials directed at children.

Accepted Answer

While self-regulation efforts exist, studies and reports indicate that fast-food advertising to children remains prevalent, suggesting limited success in significantly reducing such commercials.

Question 8

Managers can make their own "public" law.

Accepted Answer

Managers do not have the authority to make their own laws, as laws are made and enforced by government bodies or governing entities. Managers must comply with established laws and regulations.

Question 9

The Systems Approach recognizes that law is dynamic,as opposed to static.

Accepted Answer

The Systems Approach to law recognizes that law is dynamic, as it is influenced by a variety of social, economic, and political factors that are constantly changing. This approach emphasizes the need to understand the interconnectedness of various legal systems and the importance of adapting legal frameworks to changing circumstances.

Question 10

Promoting economic growth is one of the primary public policy objectives of laws and regulations applicable to business.

Accepted Answer

Promoting economic growth is indeed one of the primary public policy objectives of laws and regulations applicable to business. This is because economic growth creates jobs, increases income, and improves overall living standards, which are essential for a thriving society. Many laws and regulations related to taxation, trade, and investment are designed to promote economic growth.

Question 11

Researchers found a statistically significant inverse relationship between a country's economic prosperity,as measured by the per capita gross domestic product,and the country's judicial independence.

Accepted Answer

A statistically significant inverse relationship would imply that as a country's economic prosperity increases, its judicial independence decreases, or vice versa. However, research often shows that countries with higher economic prosperity tend to have more independent judiciaries, as economic development is frequently associated with stronger institutions, including the legal system.

Question 12

Laws enacted in response to corporate misdeeds often impose fewer restrictions and costs on business than would have been imposed had firms as a whole acted more responsibly at the outset.

Accepted Answer

The answer of Laws enacted in response to corporate misdeeds...

Question 13

According to the text,adequate protection of mminority shareholder rights increases investment in new ventures.

Accepted Answer

The text states that "research has shown that adequate protection of minority shareholder rights leads to increased investment in new ventures".

Question 14

A firm's illegal conduct has no bearing on the firm's competitive advantage because it does not necessarily divert funds form strategic investments or affect its image and reputation with its customers.

Accepted Answer

A firm's illegal conduct can negatively impact its image and reputation with customers, potentially leading to a loss of market share and competitive advantage. It may also result in legal fees and fines, diverting funds from strategic investments. Therefore, illegal conduct does have a bearing on a firm's competitive advantage.

Question 15

Each activity in regard to "law and the value chain" referenced in the text has legal aspects.

Accepted Answer

The text states that each activity in regard to "law and the value chain" has legal aspects, therefore the statement is true.

Question 16

The European Union's center of operations is in Brussels,Belgium.

Accepted Answer

The European Union's center of operations is in Brussels, Belgium.

Question 17

Under the resource-based view of a business firm,a firm's resources can be a source of sustained competitive advantage if they are valuable,rare,and perfectly imitable by competitors.

Accepted Answer

Under the resource-based view, a firm's resources can be a source of sustained competitive advantage if they are valuable, rare, and not perfectly imitable by competitors. Imperfect imitability is key to maintaining a competitive edge.

Question 18

Lobbying legislators is one method by which managers can help shape the environment in which they do business.

Accepted Answer

Lobbying legislators involves advocating for particular policies or legislation that may impact a manager's business. By influencing the legislative process and outcomes, managers can shape the legal and regulatory environment in which their business operates.

Question 19

Worker protection is one major public policy concern underlying U.S.business law.

Accepted Answer

Worker protection is a major public policy concern in the United States and is addressed through various federal and state laws, such as the Occupational Safety and Health Act (OSHA) and the Fair Labor Standards Act (FLSA). These laws aim to ensure safe and fair working conditions for employees.

Question 20

Researchers have determined that Fortune 500 firms convicted of illegal conduct earned significantly lower returns on assets than firms that had not been convicted of wrongdoing.

Accepted Answer

This is true as studies have found that companies convicted of illegal conduct experience a drop in profitability and shareholder value as a result of legal costs, fines, and damage to their reputation.

Quiz 1: Law, Value Creation, and Risk Management.