Question 1

The primary method of resolving conflicts and business disputes is through mediated office discussions.

Accepted Answer

The primary method of resolving conflicts and business disputes is through lawsuits, where one individual or organization takes another to court using civil laws.

Question 2

Of all the federal regulatory units, the Federal Trade Commission most influences business activities related to questionable practices that create disputes between businesses and their customers.

Accepted Answer

Of all the federal regulatory units, the Federal Trade Commission (FTC) most influences business activities related to questionable practices that create disputes between businesses and their customers. Although the FTC regulates a variety of business practices, it allocates a large portion of resources to curbing false advertising, misleading pricing, and deceptive packaging and labeling.

Question 3

An implied warranty stipulates the specific terms the seller will honor.

Accepted Answer

An express warranty stipulates the specific terms the seller will honor. Many automobile manufacturers, for example, provide three-year or 36,000-mile warranties on their vehicles, during which period they will fix any and all defects specified in the warranty. An implied warranty is imposed on the producer or seller by law, although it may not be a written document provided at the time of sale.

Question 4

Companies that engage in price discrimination are subject to the laws set forth in the Clayton Act.

Accepted Answer

The Clayton Act prohibits price discrimination, tying and exclusive agreements, and the acquisition of stock in another corporation where the effect may be to substantially lessen competition or tend to create a monopoly. In addition, the Clayton Act prohibits members of one company's board of directors from holding seats on the boards of competing corporations. The Act also exempts farm cooperatives and labor organizations from antitrust laws.

Question 5

The central focus for future legislation of business conducted on the Internet is the assurance of quality control.

Accepted Answer

The central focus for future legislation of business conducted on the Internet is the protection of personal privacy. The present basis of personal privacy protection is the U.S. Constitution, various Supreme Court rulings, and laws such as the 1971 Fair Credit Reporting Act, the 1978 Right to Financial Privacy Act, and the 1974 Privacy Act, which deals with the release of government records.

Question 6

Jesse owns a pawn shop. One day, a man comes into the shop with a stolen watch that he wants to pawn. Even though Jesse knows that the watch is stolen, he buys it anyway because he wants to resell it and make a profit. In this scenario, Jesse's behavior is considered to be

Accepted Answer

When Jesse buys a stolen watch to sell for a profit, he is violating criminal law, and thus, he is committing a crime. Criminal law prohibits specific kinds of actions and imposes a fine or imprisonment as punishment for violating the law.

Question 7

What is the primary difference between criminal and civil law?

Accepted Answer

The primary difference between criminal and civil law is the criminal laws are enforced by the state or nation, whereas civil laws are enforced through the court system by individuals or organizations.

Question 8

Sandeep's company recently laid him off, without giving him a reason or any severance package. He feels that the company has discriminated against him and treated him unfairly. At the very least, he feels that he deserves a severance package to help him through the transitional period. What would Sandeep most likely do to resolve this conflict with the company?

Accepted Answer

To resolve this conflict with the company, Sandeep would most likely file a lawsuit and take the company to court. The legal system provides a forum for businesspeople to resolve disputes based on legal foundations. The courts may decide when harm or damage results from the actions of others.

Question 9

All of the following are TRUE regarding courts and the resolution of disputes EXCEPT

Accepted Answer

The primary method of resolving conflicts and business disputes is through lawsuits, where one individual or organization takes another to court using civil laws. The courts may decide when harm or damage results from the actions of others. Both financial restitution and specific actions to undo wrongdoing can result from going before a court to resolve a conflict. All decisions made in the courts are based on criminal and civil laws derived from the legal and regulatory system. A businessperson may win a lawsuit, but that doesn't guarantee that the victor will be able to collect the monetary damages owed by the loser. For instance, the loser may lack the financial resources to pay the judgment.

Question 10

Bethany filed a lawsuit against her co-worker Maurice for sexual harassment in the workplace. The court ruled in her favor and ordered Maurice to pay monetary damages in the amount of $15,000. However, Bethany never received this money. What is most likely the reason the court order was not fulfilled?

Accepted Answer

In this scenario, the most likely reason that the court order was not fulfilled is that Maurice lacks the financial resources to pay the judgment. A businessperson may win a lawsuit in court and receive a judgment, or court order, requiring the loser of the suit to pay monetary damages. However, this does not guarantee the victor will be able to collect those damages. If the loser of the suit lacks the financial resources to pay the judgment, the winner of the suit may not be able to collect the award.

Question 11

________ is the legal power of the court, through a judge, to interpret and apply the law and make a binding decision in a particular case.

Accepted Answer

Jurisdiction is the legal power of the court, through a judge, to interpret and apply the law and make a binding decision in a particular case. In some instances, other courts will not enforce the decision of a prior court because it lacked jurisdiction.

Question 12

Mitchell is a judge in a court that hears all types of cases. Over the past month, he has presided over cases involving murder, identity theft, arson, and vandalism. What type of jurisdiction does this scenario describe?

Accepted Answer

This scenario describes general jurisdiction. Courts of general jurisdiction hear all types of cases; those of limited jurisdiction hear only specific types of cases.

Question 13

Jared got called for jury duty and was selected to sit on the jury for a murder case. What is a task he must complete as a juror?

Accepted Answer

As a juror, Jared must determine the facts of the case. In other words, if there is conflicting evidence, he must decide who to believe. He also must decide which law or set of laws is pertinent to the case and must then apply those laws to resolve the dispute.

Question 14

Which statement is TRUE regarding an appellate court?

Accepted Answer

An appellate court deals solely with appeals relating to the interpretation of the law. Thus, when you hear about a case being appealed, it is not retried, but rather reevaluated. Appellate judges do not hear witnesses but instead base their decisions on a written transcript of the original trial. If the appellate court finds a mistake, it usually sends the case back to the trial court so that the mistake can be corrected.

Question 15

General Corporation employs a diverse workforce that has its own labor union. When the management of the company decides to lengthen the work day and eliminate some of the company perks to save money, the union members protest, picketing outside General Corporation's office. Management brings in a neutral third party to make nonbinding suggestions for ways to resolve the dispute. Which dispute resolution method does this scenario best describe?

Accepted Answer

This scenario best describes mediation, which resolves a dispute by bringing in one or more third-party mediators, usually chosen by the disputing parties, to help reach a settlement. The mediator suggests different ways to resolve a dispute between the parties. The mediator's resolution is nonbinding, which means the parties do not have to accept the mediator's suggestions; they are strictly voluntary.

Question 16

Mediation and arbitration differ in that a mediator

Accepted Answer

Arbitration differs from mediation in that an arbitrator's decision must be followed, whereas a mediator merely offers suggestions and facilitates negotiations.

Question 17

All of the following are reasons cases may be submitted to arbitration EXCEPT

Accepted Answer

Cases may be submitted to arbitration because a labor contract requires it or because the parties agree to do so. Some consumers are barred from taking claims to court by agreements drafted by banks, brokers, health plans, and others that require them to take complaints to mandatory arbitration. Arbitration can be an attractive alternative to a lawsuit because it is often cheaper and quicker, and the parties frequently can choose arbitrators who are knowledgeable about the particular area of business at issue.

Question 18

Bill, a manager at a technology company, manages several female employees, including Megan. When Megan accuses Bill of sexual harassment, other women on her team also step forward with similar allegations. All of the parties involved agree to present a summarized version of their case to an independent third party, who advises them on the probable outcome if the case were to be tried. Based on the advisor's recommendation, the parties will attempt to negotiate a settlement. Which dispute resolution method does this scenario best describe?

Accepted Answer

This scenario best describes a mini-trial, in which both parties agree to present a summarized version of their case to an independent third party. That person then advises them of his or her impression of the probable outcome if the case were to be tried. Representatives of both sides then attempt to negotiate a settlement based on the advisor's recommendations.

Question 19

In what way is a private court system similar to arbitration?

Accepted Answer

In a sense, a private court system is similar to arbitration in that an independent third party resolves the case after hearing both sides of the story.

Question 20

When administrative agencies decide disputes that involve their regulations, the resolution process is called a(n)

Accepted Answer

Many administrative agencies decide disputes that involve their regulations. In such disputes, the resolution process is usually called a hearing rather than a trial.

Quiz 17: Personal Financial Planning and Legal and Regulatory Environment