MGT 2050 - BUSINESS LAW AND
ETHICS - MIDTERM 1 QUESTIONS
AND CORRECT ANSWERS
\.What phrase is key to understanding legal and ethical systems? - ANSWERS✔-"It
Depends"
\.What are two systems for prescribing appropriate behavior in various contexts? -
ANSWERS✔-Law and Ethics
\.What are some business pros? - ANSWERS✔-Economic growth, jobs, fill needs,
longer, easier, and more productive lives
\.What are some business cons? - ANSWERS✔-Destroy livelihoods, negatively
impact social and physical environment
\.Why is knowledge of societal context of business important? - ANSWERS✔-It
helps inform the impact of individual business decisions
\.What is the basis of all laws in the USA? - ANSWERS✔-The Constitution
\.What is the US court system modelled after? - ANSWERS✔-European system
,\.How did "stare decisis" begin? - ANSWERS✔-Judges represented the monarch
and settled disputes, then wrote down rulings to be used later.
\.What is Law? - ANSWERS✔-(in a democratic society) body of rules of action or
conduct prescribed by controlling authority and having legal binding force
\.What are some functions of the law? (there are 7 in the textbook) - ANSWERS✔-
Keep the peace, enforce rules to maintain order, facilitate planning, promote
social justice, prevent undesirable behavior, settle private and public disputes,
provide clear rules on how institutions should be run
\.What the requirements for laws to be effective and respected? - ANSWERS✔-
Must be fair, equally applied, and responsive to changing situations
\.What is one of the most important intersections between business and law? -
ANSWERS✔-Risk assessment
\.Define risk management - ANSWERS✔-Evaluation of risks and how to minimize
those risks
\.What happens when businesses take risk management to either extreme? -
ANSWERS✔-They seldom engage in profitable strategy
,\.How can people create value from the risk they are exposed to? - ANSWERS✔-
Consulting with an attorney. They are trained to think through worst case
scenarios and minimize risk.
\.Define Jurisprudence - ANSWERS✔-Study and theory of law
\.What are the two schools of thought for theories of law? - ANSWERS✔-Natural
law and legal positivism
\.Define Natural Law (jus naturale) - ANSWERS✔--There exists a higher, supreme
universal law that can be found and studied, which governs all humanity.
-All persons have inalienable, natural rights that may never be taken away, only
violated and unrecognized.
-Laws are inherently moral and should be followed
\.Who were some key figures of Natural Law? - ANSWERS✔-Aristotle- Father of
natural law. Laws come from nature.
Thomas Aquinas- Introduced religious natural law. Law given by God and can be
discovered through religion and science.
\.Define Legal Positivism - ANSWERS✔--Laws are human creations that reflect the
reality of human existence in that moment. Laws aren't necessarily moral or
immoral, but just a result of human activity.
-Laws are valid and should be followed. Rather than protesting laws, you should
change who is making laws.
, \.What assumption does Legal Positivism make? - ANSWERS✔-Previous practices
were carefully thought out and we should maintain tradition (historically, not
modern belief)
\.Define Legal Realism - ANSWERS✔-Law should serve the needs of people. Use
public policy, economic factors, and fairness to adapt the law to changing world
\.Define Sociological School - ANSWERS✔-Use contextual elements in law. Shows
how cultures, identities, and peoples interact with the law
\.Define Critical Legal Studies (1970s, newer school of thought) - ANSWERS✔-
Focuses on power dynamics of who creates, enforces, and is affected by laws.
People in power manipulate the law to maintain power. People without power
receive the penalties, but not protections of the system
\.Define Law Economics - ANSWERS✔-Apply economic theory to law. Economic
efficiency means the law is more fair. This allows markets to determine policy.
\.What is the difference between Common Law and Civil Law? - ANSWERS✔-
Common law is the outcome of judge decisions through history, while civil law
focuses on statutes and codes
\.What is the difference between Civil Law and Criminal Law? - ANSWERS✔-Civil
law focuses on disputes between private parties, while criminal law is about harm
against all people in the jurisdiction.
ETHICS - MIDTERM 1 QUESTIONS
AND CORRECT ANSWERS
\.What phrase is key to understanding legal and ethical systems? - ANSWERS✔-"It
Depends"
\.What are two systems for prescribing appropriate behavior in various contexts? -
ANSWERS✔-Law and Ethics
\.What are some business pros? - ANSWERS✔-Economic growth, jobs, fill needs,
longer, easier, and more productive lives
\.What are some business cons? - ANSWERS✔-Destroy livelihoods, negatively
impact social and physical environment
\.Why is knowledge of societal context of business important? - ANSWERS✔-It
helps inform the impact of individual business decisions
\.What is the basis of all laws in the USA? - ANSWERS✔-The Constitution
\.What is the US court system modelled after? - ANSWERS✔-European system
,\.How did "stare decisis" begin? - ANSWERS✔-Judges represented the monarch
and settled disputes, then wrote down rulings to be used later.
\.What is Law? - ANSWERS✔-(in a democratic society) body of rules of action or
conduct prescribed by controlling authority and having legal binding force
\.What are some functions of the law? (there are 7 in the textbook) - ANSWERS✔-
Keep the peace, enforce rules to maintain order, facilitate planning, promote
social justice, prevent undesirable behavior, settle private and public disputes,
provide clear rules on how institutions should be run
\.What the requirements for laws to be effective and respected? - ANSWERS✔-
Must be fair, equally applied, and responsive to changing situations
\.What is one of the most important intersections between business and law? -
ANSWERS✔-Risk assessment
\.Define risk management - ANSWERS✔-Evaluation of risks and how to minimize
those risks
\.What happens when businesses take risk management to either extreme? -
ANSWERS✔-They seldom engage in profitable strategy
,\.How can people create value from the risk they are exposed to? - ANSWERS✔-
Consulting with an attorney. They are trained to think through worst case
scenarios and minimize risk.
\.Define Jurisprudence - ANSWERS✔-Study and theory of law
\.What are the two schools of thought for theories of law? - ANSWERS✔-Natural
law and legal positivism
\.Define Natural Law (jus naturale) - ANSWERS✔--There exists a higher, supreme
universal law that can be found and studied, which governs all humanity.
-All persons have inalienable, natural rights that may never be taken away, only
violated and unrecognized.
-Laws are inherently moral and should be followed
\.Who were some key figures of Natural Law? - ANSWERS✔-Aristotle- Father of
natural law. Laws come from nature.
Thomas Aquinas- Introduced religious natural law. Law given by God and can be
discovered through religion and science.
\.Define Legal Positivism - ANSWERS✔--Laws are human creations that reflect the
reality of human existence in that moment. Laws aren't necessarily moral or
immoral, but just a result of human activity.
-Laws are valid and should be followed. Rather than protesting laws, you should
change who is making laws.
, \.What assumption does Legal Positivism make? - ANSWERS✔-Previous practices
were carefully thought out and we should maintain tradition (historically, not
modern belief)
\.Define Legal Realism - ANSWERS✔-Law should serve the needs of people. Use
public policy, economic factors, and fairness to adapt the law to changing world
\.Define Sociological School - ANSWERS✔-Use contextual elements in law. Shows
how cultures, identities, and peoples interact with the law
\.Define Critical Legal Studies (1970s, newer school of thought) - ANSWERS✔-
Focuses on power dynamics of who creates, enforces, and is affected by laws.
People in power manipulate the law to maintain power. People without power
receive the penalties, but not protections of the system
\.Define Law Economics - ANSWERS✔-Apply economic theory to law. Economic
efficiency means the law is more fair. This allows markets to determine policy.
\.What is the difference between Common Law and Civil Law? - ANSWERS✔-
Common law is the outcome of judge decisions through history, while civil law
focuses on statutes and codes
\.What is the difference between Civil Law and Criminal Law? - ANSWERS✔-Civil
law focuses on disputes between private parties, while criminal law is about harm
against all people in the jurisdiction.
