INSTRUCTOR ANSWER GUIDE
, Instructor Answer Guide - Assessment Questions
Chapter 1
1) Which country does the United States legal system derive from?
a) Germany.
b) United Kingdom.
c) United States of America.
d) Canada.
Answer: b
2) What is the function of law in the United States?
a) Establish standards.
b) Promote consistency.
c) Promote, provide, and maintain order.
d) All of the above.
Answer: d
3) As a judge, Baxter applies common law rules. These rules develop from
a) decisions of the courts in legal disputes.
b) regulations issued by administrative agencies.
c) statutes enacted by Congress and the state legislatures.
d) uniform laws drafted by legal scholars.
Answer: a
4) What is the difference between state and federal law?
Answer: Federal law is created at the national level, and applies to the entire nation (all 50
states and the District of Columbia), and U.S. territories. The U.S. Constitution forms the
basis for federal law; it establishes government, power and responsibility, as well as
preservation of the basic rights of every citizen. State law is the law of each separate U.S.
state and is applicable in that specific state. The state law applies to residents and visitors of
the state, and also to business entities, corporations, or any organizations based or
operating in that state.
,5) The legislature of the state of Wyoming enacts a new statute that sets standards for the
liability of businesses selling defective products. This statute applies in:
a) Wyoming only.
b) only Wyoming and its bordering states.
c) all states.
d) all states but only to matters not covered by other states’ laws.
Answer: a
6) Alex has been sued by Will for failure to pay rent for their apartment which source of law
will govern this lawsuit?
a) Administrative law.
b) The Constitution.
c) Civil Law.
d) Criminal Law.
Answer: c
7) Four sources of law in the U.S. legal system are:
a) Constitutional law, criminal law, civil law, and maritime law.
b) Federal law, state law, international law, and maritime law.
c) Statutory law, case law, equity, and common law.
d) Constitutional law, judicial law, legislative law, and administrative law.
Answer: d
8) Where can you find a codification of federal laws?
a) The library.
b) Federal Court.
c) United States Code.
d) U.S. Library of Congress.
Answer: c
9) What is the supreme law of the land? What are statutes? What are ordinances? What is an
administrative rule?
Answer: What is the supreme law of the land? The federal constitution is the supreme law
of the land. What are statutes? Laws enacted by Congress or a state legislative body. What
are ordinances? Laws enacted by local legislative bodies. What are administrative rules?
Laws issued by administrative agencies under the authority given to them in statutes.
10) Regulations are:
a) Laws passed by Congress.
, b) Rules made by local governments.
c) Derived from decisions made by judges.
d) Rules adopted by administrative agencies.
Answer: d
11) What is an Unfair Trade Practice and which Administrative Agency regulates it?
Answer: The term “unfair trade practices” is broadly used and refers to any deceptive or
fraudulent business practice or act that causes injury to a consumer. Some examples
include, but are not limited to, false representations of a good or service including
deceptive pricing, non-compliance with manufacturing standards, and false advertising. The
FTC investigates allegations of unfair trade practices raised by consumers and businesses,
pre-merger notification filings, congressional inquiries, or reports in the media and may
seek voluntary compliance by offending businesses through a consent order, administrative
complaints, or federal litigation.
12) Some of the rights in the Constitution’s Bill of Rights extends to Corporations.
a) True.
b) False.
Answer: a
13) Forms of Alternative Dispute Resolution (“ADR”) include all of the following except:
a) Mediation.
b) Settlement.
c) Litigation.
d) Arbitration.
Answer: c
14) Consequences of being convicted a crime include all of the following except:
a) Prison.
b) Fines.
c) Community service.
d) Damages.
Answer: d
15) Securities are only regulated by federal laws.
a) True.
b) False.
Answer: b
,Chapter 2
1) A process in which a third party selected by the disputants helps the parties to voluntary
resolve their disagreement is known as:
a) Mediation.
b) Discovery.
c) Arbitration.
d) Settlement.
Answer: a
2) What’s the first step in Alternative Dispute Resolution?
a) Conciliation.
b) Mediation.
c) Negotiation.
d) Arbitration.
Answer: c
3) What’s the definition of negotiation?
Answer: The process by which parties with nonidentical preferences allocate resources
through interpersonal activity and joint decision making.
4) How does the process of negotiation work?
Answer: In the process of negotiation, the parties come together informally, with or without
attorneys to represent them. Within this informal setting the parties air their differences
and try to reach a settlement or resolution without the involvement of independent third
parties. Because no third parties are involved and because of the informal setting,
negotiation is the simplest form of alternative dispute resolution.
5) Explain the Thomas-Kilmann Conflict Mode Instrument.
Answer: The Thomas-Kilmann Conflict Mode Instrument (TKI) is a questionnaire that
provides a systematic framework for categorizing five broad negotiation styles. It is closely
associated with work done by conflict resolution experts Dean Pruitt and Jeffrey Rubin.
These styles are often considered in terms of the level of self-interest, instead of how other
negotiators feel. These five general negotiation styles include:
Forcing. If a party has high concern for itself, and low concern for the other party, it may
adopt a competitive approach that only takes into account the outcomes it desires. This
, negotiation style is most prone to zero-sum thinking. For example, a car dealership that
tries to give each customer as little as possible for his or her trade-in vehicle would be
applying a forcing negotiation approach. While the party using the forcing approach is only
considering its own self- interests, this negotiating style often undermines the party’s long-
term success. For example, in the car dealership example, if a customer feels she has not
received a fair trade-in value after the sale, she may leave negative reviews and will not
refer her friends and family to that dealership and will not return to it when the time comes
to buy another car.
Collaborating. If a party has high concern and care for both itself and the other party, it will
often employ a collaborative negotiation that seeks to maximum the gain for both. In this
negotiating style, parties recognize that acting in their mutual interests may create greater
value and synergies.
Compromising. A compromising approach to negotiation will take place when parties share
some concerns for both themselves and the other party. While it is not always possible to
collaborate, parties can often find certain points that are more important to one versus the
other, and in that way, find ways to isolate what is most important to each party.
6) A person trained in conflict resolution is considered:
a) An arbitrator.
b) A mediator.
c) A negotiator.
d) A judge.
Answer: b
7) Mediation focuses on:
a) Solutions.
b) Testimony.
c) Expert witnesses.
d) Discoveries.
Answer: a
8) Names the Steps in Mediation.
Answer: Mediator’s Opening Statement: During the opening statement, the mediator
introduces himself or herself and explains the goals of mediation.
• Opening Statements of Plaintiff and Defendant: Both parties are given the opportunity
to speak, without interruption. During this opening statement, both parties are afforded
the opportunity to describe the nature of the dispute and their desired solution.
• Joint Discussion: The mediator will try to get the two disagreeing parties to speak to one
another and will guide the discussion toward a mutually amicable solution. This part of
the mediation process usually identifies which issues need to be resolved and explores
ways to address the issues.
, • Private Caucus: During this stage, each party has the ability to meet and speak privately
with the mediator. Typically, the mediator will use this time to learn more about what is
most important to each party and to brainstorm ways to find a resolution. The mediator
may ask the parties to try to put aside their emotional responses and resentments to
work toward an agreement.
• Joint Negotiation: After the private caucuses, the parties are joined again in the same
room, and the mediator presents any newly discovered insight to guide them toward an
agreement.
• Closure: During this final stage, an agreement is reached, or it is determined that the
parties cannot agree. Either way, the mediator will review the positions of each party
and ask them if they would like to meet again or explore escalating options, such as
moving the dispute to court.
9) What’s the main benefit of e-mediation?
Answer: E-mediation can be useful in situations where the parties are geographically far
apart, or the transaction in dispute took place online. eBay uses e-mediation to handle the
sheer volume of misunderstandings between parties. Research has shown that one of the
benefits of e-mediation is that it allows people the time needed to “cool down” when they
have to explain their feelings in an email, as opposed to speaking to others in person.
In addition to technological advancements, new findings in psychology are influencing how
disputes are resolved, such as the rising interest in canine-assisted mediation (CAM), in
which the presence of dogs is posited to have an impact on human emotional health. Since
the presence of dogs has a positive impact on many of the neurophysiological stress
markers in humans, researchers are beginning to explore the use of therapy animals to
assist in dispute resolution.
10) Roger and Larry are having a dispute regarding their joint business. They want to have a
binding resolution to their dispute, but they would prefer to have the dispute handled
privately and by someone with special expertise. The best form of dispute resolution for
their problem would be:
a. Arbitration.
b. Litigation.
c. Mediation.
d. Summary Jury Trial.
Answer: a
11) All of the following are methods to enforce an arbitrator’s decision except:
a) Writs of Execution.
b) Garnishment.
c) Fines.
d) Liens.
, Answer: c
12) Describe the typical steps in Arbitration.
Answer: When parties enter into arbitration, certain procedures are followed. First, the
number of arbitrators is decided, along with how they will be chosen. Parties that enter into
willing arbitration may have more control over this decision, while those that do so
unwillingly may have a limited pool of arbitrators from which to choose. In the case of
willing arbitration, parties may decide to have three arbitrators, one chosen by each of the
disputants and the third chosen by the elected arbitrators. Next, a timeline is established,
and evidence is presented by both parties. Since arbitration is less formal than court
proceedings, the evidence phase typically goes faster than it would in a courtroom setting.
Finally, the arbitrator will make a decision and usually makes one or more awards.
13) Explain the differences between binding and non-binding arbitration.
Answer: In binding arbitration, the decision of the arbitrator is final, and except in rare
circumstances, neither party can appeal the decision through the court system. In non-
binding arbitration, the arbitrator’s award can be thought of as a recommendation: it is only
finalized if both parties agree that it is an acceptable solution.
14) All of the following are the most common applications of arbitration in the business context
except:
a) Labor.
b) Business Transactions.
c) Property Disputes.
d) Torts.
Answer: d
15) The following are the type of awards that may be issue by an arbitrator:
a) Bare Bones.
b) Reasoned.
c) Both a and b.
d) Neither a nor b.
Answer: c
Chapter 3
1) Define business ethics.
, Answer: Acceptable levels of behavior for each individual who makes up the organization.
2) Who decides the business ethics for a company?
a) The HR department.
b) The employees.
c) Leadership.
d) Consultants.
Answer: c
3) All of the following are examples of results of unethical business actions except:
a) Recruitment and retention problems.
b) Lower employee salaries.
c) Negative employee relations.
d) Poor company reputation.
Answer: b
4) Ethical rules can be based on deep values of an organization which may include:
a) Quality of products and services.
b) Commitment to customers.
c) How the organization gives back to the community.
d) All of the above.
Answer: d
5) According to Kimberlee Leonard of the Houston Chronicle the elements that belong in a
Code of Conduct for a company include all of the following except:
a) Office Hours.
b) Professional behaviors.
c) Regulatory ethics.
d) Legal considerations.
Answer: a
6) What’s the definition of Corporate Responsibility?
Answer: Corporate Responsibility refers to the idea that a business is given the opportunity
and privilege to make the world a better place. This process can happen through a variety of
methods, including the donation of funds, volunteerism, and implementation of
environmentally friendly policies. It is up to each organization to determine the best way to
demonstrate social responsibility.
7) Where did the term Corporate Responsibility originate?
, Answer: The earliest published book about the topic is Corporate Responsibility of the
Businessman, published in 1953. This book introduced the concept of companies giving
back as a form of investment in the future. This idea came from a generation that had
survived some of the hardest times in our world and wanted to make it a better place for
generations to come.
8) The benefits of Corporate Responsibility for a business include:
a) Talent attraction.
b) Consumer influence.
c) Improved perception by investors.
d) All of the above.
Answer: d
9) The three dimensions of the triple bottom line include all of the following except:
a) Profits.
b) People.
c) Planet.
d) Promotion.
Answer: d
10) Distinguish between corporate social responsibility and social marketing.
Answer: Social marketing attempts to change the attitudes and behaviors of consumers by
using a variety of marketing methods. However, corporate social responsibility is a
sustainable effort that can be measured.
Chapter 4
1) Explain Police Power and the Dormant Commerce Clause.
Answer: The authority of the federal government to regulate interstate commerce has, at
times, come into conflict with state authority over the same area of regulation. The courts
have tried to resolve these conflicts with reference to the police power of the states.
Police power refers to the residual powers granted to each state to safeguard the welfare of
their inhabitants. Examples of areas in which states tend to exercise their police power are
zoning regulations, building codes, and sanitation standards for eating places. However,
there are times when the states’ use of police power impacts interstate commerce. If the
exercise of the power interferes with, or discriminates against, interstate commerce, then
, Instructor Answer Guide - Assessment Questions
Chapter 1
1) Which country does the United States legal system derive from?
a) Germany.
b) United Kingdom.
c) United States of America.
d) Canada.
Answer: b
2) What is the function of law in the United States?
a) Establish standards.
b) Promote consistency.
c) Promote, provide, and maintain order.
d) All of the above.
Answer: d
3) As a judge, Baxter applies common law rules. These rules develop from
a) decisions of the courts in legal disputes.
b) regulations issued by administrative agencies.
c) statutes enacted by Congress and the state legislatures.
d) uniform laws drafted by legal scholars.
Answer: a
4) What is the difference between state and federal law?
Answer: Federal law is created at the national level, and applies to the entire nation (all 50
states and the District of Columbia), and U.S. territories. The U.S. Constitution forms the
basis for federal law; it establishes government, power and responsibility, as well as
preservation of the basic rights of every citizen. State law is the law of each separate U.S.
state and is applicable in that specific state. The state law applies to residents and visitors of
the state, and also to business entities, corporations, or any organizations based or
operating in that state.
,5) The legislature of the state of Wyoming enacts a new statute that sets standards for the
liability of businesses selling defective products. This statute applies in:
a) Wyoming only.
b) only Wyoming and its bordering states.
c) all states.
d) all states but only to matters not covered by other states’ laws.
Answer: a
6) Alex has been sued by Will for failure to pay rent for their apartment which source of law
will govern this lawsuit?
a) Administrative law.
b) The Constitution.
c) Civil Law.
d) Criminal Law.
Answer: c
7) Four sources of law in the U.S. legal system are:
a) Constitutional law, criminal law, civil law, and maritime law.
b) Federal law, state law, international law, and maritime law.
c) Statutory law, case law, equity, and common law.
d) Constitutional law, judicial law, legislative law, and administrative law.
Answer: d
8) Where can you find a codification of federal laws?
a) The library.
b) Federal Court.
c) United States Code.
d) U.S. Library of Congress.
Answer: c
9) What is the supreme law of the land? What are statutes? What are ordinances? What is an
administrative rule?
Answer: What is the supreme law of the land? The federal constitution is the supreme law
of the land. What are statutes? Laws enacted by Congress or a state legislative body. What
are ordinances? Laws enacted by local legislative bodies. What are administrative rules?
Laws issued by administrative agencies under the authority given to them in statutes.
10) Regulations are:
a) Laws passed by Congress.
, b) Rules made by local governments.
c) Derived from decisions made by judges.
d) Rules adopted by administrative agencies.
Answer: d
11) What is an Unfair Trade Practice and which Administrative Agency regulates it?
Answer: The term “unfair trade practices” is broadly used and refers to any deceptive or
fraudulent business practice or act that causes injury to a consumer. Some examples
include, but are not limited to, false representations of a good or service including
deceptive pricing, non-compliance with manufacturing standards, and false advertising. The
FTC investigates allegations of unfair trade practices raised by consumers and businesses,
pre-merger notification filings, congressional inquiries, or reports in the media and may
seek voluntary compliance by offending businesses through a consent order, administrative
complaints, or federal litigation.
12) Some of the rights in the Constitution’s Bill of Rights extends to Corporations.
a) True.
b) False.
Answer: a
13) Forms of Alternative Dispute Resolution (“ADR”) include all of the following except:
a) Mediation.
b) Settlement.
c) Litigation.
d) Arbitration.
Answer: c
14) Consequences of being convicted a crime include all of the following except:
a) Prison.
b) Fines.
c) Community service.
d) Damages.
Answer: d
15) Securities are only regulated by federal laws.
a) True.
b) False.
Answer: b
,Chapter 2
1) A process in which a third party selected by the disputants helps the parties to voluntary
resolve their disagreement is known as:
a) Mediation.
b) Discovery.
c) Arbitration.
d) Settlement.
Answer: a
2) What’s the first step in Alternative Dispute Resolution?
a) Conciliation.
b) Mediation.
c) Negotiation.
d) Arbitration.
Answer: c
3) What’s the definition of negotiation?
Answer: The process by which parties with nonidentical preferences allocate resources
through interpersonal activity and joint decision making.
4) How does the process of negotiation work?
Answer: In the process of negotiation, the parties come together informally, with or without
attorneys to represent them. Within this informal setting the parties air their differences
and try to reach a settlement or resolution without the involvement of independent third
parties. Because no third parties are involved and because of the informal setting,
negotiation is the simplest form of alternative dispute resolution.
5) Explain the Thomas-Kilmann Conflict Mode Instrument.
Answer: The Thomas-Kilmann Conflict Mode Instrument (TKI) is a questionnaire that
provides a systematic framework for categorizing five broad negotiation styles. It is closely
associated with work done by conflict resolution experts Dean Pruitt and Jeffrey Rubin.
These styles are often considered in terms of the level of self-interest, instead of how other
negotiators feel. These five general negotiation styles include:
Forcing. If a party has high concern for itself, and low concern for the other party, it may
adopt a competitive approach that only takes into account the outcomes it desires. This
, negotiation style is most prone to zero-sum thinking. For example, a car dealership that
tries to give each customer as little as possible for his or her trade-in vehicle would be
applying a forcing negotiation approach. While the party using the forcing approach is only
considering its own self- interests, this negotiating style often undermines the party’s long-
term success. For example, in the car dealership example, if a customer feels she has not
received a fair trade-in value after the sale, she may leave negative reviews and will not
refer her friends and family to that dealership and will not return to it when the time comes
to buy another car.
Collaborating. If a party has high concern and care for both itself and the other party, it will
often employ a collaborative negotiation that seeks to maximum the gain for both. In this
negotiating style, parties recognize that acting in their mutual interests may create greater
value and synergies.
Compromising. A compromising approach to negotiation will take place when parties share
some concerns for both themselves and the other party. While it is not always possible to
collaborate, parties can often find certain points that are more important to one versus the
other, and in that way, find ways to isolate what is most important to each party.
6) A person trained in conflict resolution is considered:
a) An arbitrator.
b) A mediator.
c) A negotiator.
d) A judge.
Answer: b
7) Mediation focuses on:
a) Solutions.
b) Testimony.
c) Expert witnesses.
d) Discoveries.
Answer: a
8) Names the Steps in Mediation.
Answer: Mediator’s Opening Statement: During the opening statement, the mediator
introduces himself or herself and explains the goals of mediation.
• Opening Statements of Plaintiff and Defendant: Both parties are given the opportunity
to speak, without interruption. During this opening statement, both parties are afforded
the opportunity to describe the nature of the dispute and their desired solution.
• Joint Discussion: The mediator will try to get the two disagreeing parties to speak to one
another and will guide the discussion toward a mutually amicable solution. This part of
the mediation process usually identifies which issues need to be resolved and explores
ways to address the issues.
, • Private Caucus: During this stage, each party has the ability to meet and speak privately
with the mediator. Typically, the mediator will use this time to learn more about what is
most important to each party and to brainstorm ways to find a resolution. The mediator
may ask the parties to try to put aside their emotional responses and resentments to
work toward an agreement.
• Joint Negotiation: After the private caucuses, the parties are joined again in the same
room, and the mediator presents any newly discovered insight to guide them toward an
agreement.
• Closure: During this final stage, an agreement is reached, or it is determined that the
parties cannot agree. Either way, the mediator will review the positions of each party
and ask them if they would like to meet again or explore escalating options, such as
moving the dispute to court.
9) What’s the main benefit of e-mediation?
Answer: E-mediation can be useful in situations where the parties are geographically far
apart, or the transaction in dispute took place online. eBay uses e-mediation to handle the
sheer volume of misunderstandings between parties. Research has shown that one of the
benefits of e-mediation is that it allows people the time needed to “cool down” when they
have to explain their feelings in an email, as opposed to speaking to others in person.
In addition to technological advancements, new findings in psychology are influencing how
disputes are resolved, such as the rising interest in canine-assisted mediation (CAM), in
which the presence of dogs is posited to have an impact on human emotional health. Since
the presence of dogs has a positive impact on many of the neurophysiological stress
markers in humans, researchers are beginning to explore the use of therapy animals to
assist in dispute resolution.
10) Roger and Larry are having a dispute regarding their joint business. They want to have a
binding resolution to their dispute, but they would prefer to have the dispute handled
privately and by someone with special expertise. The best form of dispute resolution for
their problem would be:
a. Arbitration.
b. Litigation.
c. Mediation.
d. Summary Jury Trial.
Answer: a
11) All of the following are methods to enforce an arbitrator’s decision except:
a) Writs of Execution.
b) Garnishment.
c) Fines.
d) Liens.
, Answer: c
12) Describe the typical steps in Arbitration.
Answer: When parties enter into arbitration, certain procedures are followed. First, the
number of arbitrators is decided, along with how they will be chosen. Parties that enter into
willing arbitration may have more control over this decision, while those that do so
unwillingly may have a limited pool of arbitrators from which to choose. In the case of
willing arbitration, parties may decide to have three arbitrators, one chosen by each of the
disputants and the third chosen by the elected arbitrators. Next, a timeline is established,
and evidence is presented by both parties. Since arbitration is less formal than court
proceedings, the evidence phase typically goes faster than it would in a courtroom setting.
Finally, the arbitrator will make a decision and usually makes one or more awards.
13) Explain the differences between binding and non-binding arbitration.
Answer: In binding arbitration, the decision of the arbitrator is final, and except in rare
circumstances, neither party can appeal the decision through the court system. In non-
binding arbitration, the arbitrator’s award can be thought of as a recommendation: it is only
finalized if both parties agree that it is an acceptable solution.
14) All of the following are the most common applications of arbitration in the business context
except:
a) Labor.
b) Business Transactions.
c) Property Disputes.
d) Torts.
Answer: d
15) The following are the type of awards that may be issue by an arbitrator:
a) Bare Bones.
b) Reasoned.
c) Both a and b.
d) Neither a nor b.
Answer: c
Chapter 3
1) Define business ethics.
, Answer: Acceptable levels of behavior for each individual who makes up the organization.
2) Who decides the business ethics for a company?
a) The HR department.
b) The employees.
c) Leadership.
d) Consultants.
Answer: c
3) All of the following are examples of results of unethical business actions except:
a) Recruitment and retention problems.
b) Lower employee salaries.
c) Negative employee relations.
d) Poor company reputation.
Answer: b
4) Ethical rules can be based on deep values of an organization which may include:
a) Quality of products and services.
b) Commitment to customers.
c) How the organization gives back to the community.
d) All of the above.
Answer: d
5) According to Kimberlee Leonard of the Houston Chronicle the elements that belong in a
Code of Conduct for a company include all of the following except:
a) Office Hours.
b) Professional behaviors.
c) Regulatory ethics.
d) Legal considerations.
Answer: a
6) What’s the definition of Corporate Responsibility?
Answer: Corporate Responsibility refers to the idea that a business is given the opportunity
and privilege to make the world a better place. This process can happen through a variety of
methods, including the donation of funds, volunteerism, and implementation of
environmentally friendly policies. It is up to each organization to determine the best way to
demonstrate social responsibility.
7) Where did the term Corporate Responsibility originate?
, Answer: The earliest published book about the topic is Corporate Responsibility of the
Businessman, published in 1953. This book introduced the concept of companies giving
back as a form of investment in the future. This idea came from a generation that had
survived some of the hardest times in our world and wanted to make it a better place for
generations to come.
8) The benefits of Corporate Responsibility for a business include:
a) Talent attraction.
b) Consumer influence.
c) Improved perception by investors.
d) All of the above.
Answer: d
9) The three dimensions of the triple bottom line include all of the following except:
a) Profits.
b) People.
c) Planet.
d) Promotion.
Answer: d
10) Distinguish between corporate social responsibility and social marketing.
Answer: Social marketing attempts to change the attitudes and behaviors of consumers by
using a variety of marketing methods. However, corporate social responsibility is a
sustainable effort that can be measured.
Chapter 4
1) Explain Police Power and the Dormant Commerce Clause.
Answer: The authority of the federal government to regulate interstate commerce has, at
times, come into conflict with state authority over the same area of regulation. The courts
have tried to resolve these conflicts with reference to the police power of the states.
Police power refers to the residual powers granted to each state to safeguard the welfare of
their inhabitants. Examples of areas in which states tend to exercise their police power are
zoning regulations, building codes, and sanitation standards for eating places. However,
there are times when the states’ use of police power impacts interstate commerce. If the
exercise of the power interferes with, or discriminates against, interstate commerce, then
