Question 1

Volt City,a home electronics store likes to advertise products at very low prices to attract customers to their store knowing they don't have those products in stock.Their sales people then tell the customers that those products are all sold out but,they can buy another,more expensive product.This practice is:

Accepted Answer

This practice is known as "bait and switch," which is both unethical and illegal as it involves deceptive advertising to lure customers under false pretenses.

Question 2

Bernice,a salesperson,in attempting to close more sales makes false and deceptive comparisons with a competitor's product.This is called:

Accepted Answer

Product disparagement involves making false and misleading statements about a competitor's products, which is what Bernice is doing by making deceptive comparisons.

Question 3

John sells heavy machinery to international markets.His company has no clear policy of not giving or accepting bribes.He is presently dealing with a company in another country where bribes are a common business practice.Above all,John should be guided by:

Accepted Answer

John should be guided by the ethical principle, which emphasizes doing what is morally right and just. Giving or accepting bribes is considered an unethical and corrupt practice, and John should not engage in it, even if it is common in the country he is dealing with. While the other options like legal principle and company policy might be important, they may not always align with ethical principles. Therefore, it is crucial for John to prioritize ethics in his business dealings.

Question 4

A clause which prohibits an employee from joining a competing firm for a year after they leave employment is called:

Accepted Answer

This type of clause is commonly known as a noncompete clause or covenant not to compete, which is a contractual agreement between an employer and employee where the employee agrees not to work for a competitor or start a competing business for a certain period after leaving the current employer.

Question 5

Amy watched her sales manager put a round of golf and dinner on his expense account.He told her that expenses of this nature were acceptable behaviour for management,but not reps.This is:

Accepted Answer

The sales manager is demonstrating a double standard by allowing himself privileges that are not extended to others, which makes him a poor role model for his team.

Question 6

Alberto adheres to the principles of the Competition Act.Included in the issues addressed by this Act are price fixing,pricing discrimination,predatory pricing,and:

Accepted Answer

Bid rigging is a prohibited practice under the Competition Act, which involves conspiring to fix bids or engaging in bid suppression or bid rotation. It is a form of antitrust violation that harms competition in the marketplace. The other options, such as selling goods to all eligible customers, multi-level marketing plans, referred customers, and direct selling, do not fall under the purview of the Competition Act.

Question 7

Which of the following statements about "cooling off" laws is correct?

Accepted Answer

Cooling off laws allow customers to reconsider decisions that may have been made under a salesperson's influence. These laws provide customers with a period of time during which they can cancel a contract without penalty. The period of time and conditions vary depending on the jurisdiction and type of contract.

Question 8

Upon closing a large sale,Rebecca offered her company pen to Jerry,the manager who signed the deal.This action would normally be considered as:

Accepted Answer

Offering a company pen as a gift to the manager who signed the deal is considered as a form of gift giving. It is a common practice in business to offer small gifts, souvenirs or tokens of appreciation as a gesture of goodwill, without any expectation of return or obligation.

Question 9

Your competitor is using exaggerated claims to increase their sales.To retaliate you want to make unsubstantiated counter claims to build a stronger case for your product.You are then dealing with a:

Accepted Answer

Making unsubstantiated counter claims would be unethical as it would involve spreading false information about the competitor's product and potentially misleading customers. While it may be tempting to respond in kind to a competitor's exaggerated claims, it is not an ethical or sustainable business practice. Instead, it would be better to focus on highlighting the actual strengths of your own product and maintaining transparency and honesty with customers.

Question 10

Jimmy made a habit of buying products only from those companies he sold his products to.We would call this practice:

Accepted Answer

Reciprocity is the practice of exchanging things with others for mutual benefit, especially privileges granted by one country or organization to another. In this case, Jimmy is buying products only from the companies he sells his products to, which creates a reciprocal relationship between him and these companies. This could be seen as a business strategy to build stronger relationships and possibly gain advantages in the future.

Question 11

The employment contract Janice signed included a clause which prevented her from joining a competing firm for a year after she left her present employment.Such a clause is an example of:

Accepted Answer

The clause described is a noncompete clause, which is a common practice in many employment contracts. It is legal as long as it is reasonable in terms of geographic scope, time period, and the employee's job responsibilities.

Question 12

Product disparagement occurs when:

Accepted Answer

Product disparagement refers to making false or misleading statements about a competitor's product or service that tarnishes their reputation or harms their sales. Making deceptive comparisons between your product and your competitor's product falls under the category of product disparagement. The other options listed do not necessarily involve disparaging a competitor's product.

Question 13

Aaron finds that viewing selling as an exchange of value,putting the relationship ahead of achieving sales goals,and being honest with himself and his customers are all part of:

Accepted Answer

Aaron's beliefs of viewing selling as an exchange of value, putting relationship ahead of sales goals and being honest with himself and his customers align with a good formulation for a personal code of ethics. It shows that Aaron is focused on building long-term relationships with his customers rather than just achieving short-term sales goals.

Question 14

Roberta learned about the Competition Act in sales class.Some of the issues included are price fixing,bid rigging,price discrimination,and:

Accepted Answer

Predatory pricing is an antitrust issue that can occur when a company charges very low prices to drive competitors out of the market. This can be illegal under the Competition Act if it is done with the intention of monopolizing the market.

Question 15

A business is legally bound by a verbal or written contract made by its sales people because:

Accepted Answer

Sales people are legal representatives of their company and therefore have the authority to enter into contracts on behalf of the business. The business is therefore bound by these contracts, whether verbal or written.

Question 16

Legal standards are enforced by:

Accepted Answer

Legal standards are typically enforced by statute, which are laws passed by a governing body such as a legislature. Industry standards or company standards may be enforced through contracts or voluntary compliance, but they do not have the force of law. Society as a whole may enforce certain norms and values, but these are typically not legal standards.

Question 17

Legislation which give customers an opportunity to reconsider a buying decision made under a salesperson's persuasive influence is called:

Accepted Answer

The legislation which give customers an opportunity to reconsider a buying decision made under a salesperson's persuasive influence is called cooling-off laws. These laws allow customers to cancel an agreement within a specified period after the purchase is made.

Question 18

The difference between a "gift" and "bribe" is:

Accepted Answer

A gift is typically given to foster goodwill and build a positive relationship, whereas a bribe is given with the intention of influencing someone to take a specific action. Bribery is illegal and considered unethical in most cases, while gift-giving can be acceptable in certain situations, such as during the holiday season or to express gratitude. The other options are incorrect or incomplete.

Question 19

The legislation which ensures consumers are protected and fosters a competitive environment is called:

Accepted Answer

The Competition Act is a Canadian law that aims to foster competition and protect consumers from anti-competitive practices such as price-fixing, misleading advertising, and abuse of dominant market positions. It promotes fair competition in the marketplace, ensuring that consumers have access to a variety of goods and services at competitive prices.

Question 20

When Rachel signed the contracts at MicroManage,Inc.,she included an envelope that contained two season tickets to the Raptors games.This action would normally be considered as:

Accepted Answer

Including an envelope with two season tickets to the Raptors games when signing contracts could be considered bribery, as it appears to be a gift given with the intention of influencing the recipient's actions regarding the business deal.

Quiz 5: Ethics: the Foundation for Relationships in Selling