Deck 8: Ethics and Products

Question 1

Ford and Firestone have been named as defendants in lawsuits brought by owners of Ford Explorers who have been involved in rollover accidents in their vehicles.For Firestone to be held solely liable for the accidents:

A)Ford must establish that there was no defect in design or manufacture or warning with its Explorer.
B)Firestone cannot be held liable to the Explorer owners because they did not buy their tires directly from Firestone.
C)Ford must show that Firestone was aware of defects in its tires.
D)None of the above

Answer 1

A

Question 2

What was Lee Iacocca's objective in designing the Pinto?

A)A car less than 2,000 pounds that cost less than $2,000
B)A carefully designed competitor for small imports
C)Safety
D)None of the above

Answer 2

A

Question 3

The failure to provide safe packaging is a product liability issue.

Answer 3

True

Question 4

The suits against McDonald's for plaintiffs' obesity have been dismissed.

Question 5

For Ford to be held solely liable for the accidents:

A)Firestone can show that the condition of its tires was changed by use and operation on the Explorers.
B)Firestone must show that Ford was aware of a problem with the Explorer.
C)Ford cannot be held solely liable to the Explorer owners.
D)None of the above

Question 6

Kellogg's was forced to remove its claims that Rice Krispies increased children's attentiveness from its cereal boxes.

Question 7

What did the memo entitled, "Fatalities Associated with Crash Induced Fuel Leakage and Fires" analyze?

A)Other auto manufacturers' cars and their risks
B)The cost-benefit analysis of producing the Pinto as is or changing its design/components
C)The history of rear-end auto collisions in the U.S.
D)None of the above

Question 8

The FDA declined to regulate General Mills and Cheerios ads.

Question 9

The failure to redesign a product with a safety flaw is a product liability issue.

Question 10

What value did Ford put on human life in its analysis of its Pinto issue?

A)$2 million
B)$1 million
C)$200,000
D)$100,000

Question 11

The sale of a product with known, but undisclosed dangers, is unethical.

Question 12

If Firestone establishes that Ford provided incorrect instructions for owners on inflation of tires and that the tires were underinflated at the time of the accidents:

A)Ford is liable if it was aware of the underinflation.
B)Ford is not liable because of Firestone's failure to anticipate the inflation issue.
C)Ford is liable.
D)None of the above

Question 13

What was the cost of partially or completely fixing the Pinto gas tank to better withstand rear-end collision impact?

A)The costs of the changes ranged from $1.80 to $15.30
B)The costs were over 10% of the cost of the car
C)The costs were too great because the car had to be redesigned
D)None of the above

Question 14

Tylenol's competitors were able to win customers when Tylenol's quality control problem was revealed.

Question 15

Releasing a product with known safety problems for sale to the public is an ethical breach.

Question 16

Toyota was clear on the cause of accidents in its vehicles from the first complaint of sudden acceleration.

Question 17

In addition to the crush space issues, what other problems did the Pinto design have?

A)None, the only problem was the crush space
B)The price of the car was too high
C)Protruding flanges and bolt heads
D)None of the above

Question 18

Tylenol did a rapid recall of its products when consumers reported black flecks were present in the liquid product forms of the company's analgesics.

Question 19

What dictated the placement of the Pinto gas tank?

A)Safety
B)Style
C)Weight
D)Government regulations

Question 20

You are in marketing for one of the three U.S.auto manufacturers.You have just received a notice from your seat belt buckle supplier that the buckles shipped to you and used in the cars made between June 94 and September 94 are defective.The defect means that the buckles will come undone if pressure is placed on the belts at any speed over 10 miles per hour.You must encourage your firm to issue a recall.

Question 21

Who is Edward Ivey?

A)The drunk driver in the Malibu accident case
B)CEO of General Motors
C)Engineer who performed a cost-benefit analysis on the Malibu and its gas tank issues
D)None of the above

Question 22

What was Coke's strategy for expanding fountain sales?

A)Sign up new fast-food franchises
B)Move Frozen Coke into fast-food franchises
C)Eliminate Frozen Coke from convenience stores
D)None of the above

Question 23

What was the original verdict against GM in the LA Malibu case?

A)$1.2 billion
B)$2 billion
C)$4.9 billion
D)$5.0 billion

Question 24

What changes did Jack-in-the-Box make after the E-Coli poisonings?

A)Changed meat suppliers
B)Increased cooking temperature
C)Added extra meat inspections
D)a and b only
E)a, b, and c

Question 25

What temperature were most fast-food chains using at the time of the Jack-in-the-Box E-Coli illnesses and deaths?

A)140 degrees
B)150 degrees
C)155 degrees
D)160 degrees
E)165 degrees

Question 26

Jack-in-the-Box, Inc.cooked its hamburgers according to the temperature required by law.Other chains cooked their hamburgers at a higher temperature and for longer.Jack-in-the-Box:

A)Made a decision that resulted in liability and the moral responsibility for deaths and injuries of its customers.
B)Was in compliance with the law and ethical in its conduct.
C)Has no liability because it was in compliance with the law.
D)Both b and c
E)None of the above

Question 27

How much did Jack-in-the-Box have to have set aside for payments in the suits filed against it?

A)$20 million
B)$50 million
C)$100 million
D)$200 million

Question 28

Why did Burger King want a test market?

A)The product was new
B)Its marketing campaigns recently had been disasters
C)It did not trust Coke
D)Both a and b
E)a, b and c

Question 29

What memo did GM have that was different from the Ford Pinto situation?

A)There was no GM memo
B)A memo from a lawyer advising against releasing any internal company analysis of the Malibu design
C)A memo that fired engineers who worked on the Malibu
D)None of the above

Question 30

Who is Richard Grimshaw?

A)Ford engineer who did the cost-benefit analysis on the Pinto
B)A teen who was severely burned when the Pinto he was riding in exploded into flames following a rear-end collision
C)CEO of Ford Motor
D)Secretary of the Department of Transportation

Question 31

The sale of a product with a known defect or with knowledge of its potentially harmful impact on users:

A)Is illegal.
B)Is unethical.
C)Exposes the manufacturer to strict and negligent product liability.
D)Both b and c

Question 32

What was the impact of the E-Coli poisonings on Jack-in-the-Box sales?

A)Sales remained the same, unaffected
B)Sales dropped 10%
C)Sales dropped 20%
D)Jack-in-the-Box was closed so there were no sales

Question 33

How many Jack-in-the-Box customers were affected by the E-Coli poisonings?

A)100
B)150
C)300
D)600

Question 34

What did the state of Indiana do with regard to Ford's Pinto?

A)Banned the sale of the Pinto in the state
B)Indicted Ford for reckless homicide
C)Filed suit to recover damages for burn victims
D)Fined Ford $200,000 per accident

Question 35

What was the required legal temperature for cooking burgers at the time of the E-Coli illnesses and deaths?

A)140 degrees
B)150 degrees
C)155 degrees
D)160 degrees
E)165 degrees

Question 36

What temperature was Jack-in-the-Box cooking its burgers at when the E-Coli illnesses and deaths occurred?

A)140 degrees
B)150 degrees
C)155 degrees
D)160 degrees
E)165 degrees

Question 37

What happened to Mrs.Gray when her Pinto was rear-ended by a Galaxie?

A)She managed to escape from the car
B)Nothing; the gas tank survived the impact
C)She was burned severely and died of congestive heart failure
D)None of the above

Question 38

What did the GM internal memo estimate the cost of the exploding gas tanks would be to GM?

A)$2.40 per car
B)The memo did not do that analysis because it did not put a value on human life
C)GM had learned from the Ford Pinto case and did not have such a memo
D)$200,000 per car

Question 39

Which car that GM manufactured had issues similar to the Pinto?

A)Malibu
B)Corvette
C)Cadillac
D)Both a and b

Question 40

How did Patricia Anderson's car get rear-ended?

A)The car stalled on the freeway and she was trying to get off the freeway when she was rear-ended
B)She was rear-ended by a car going 70 mph as she sat at a stop sign
C)She was not rear-ended; her car exploded at a stop sign
D)None of the above

Question 41

Coca-Cola's test marketing of Frozen Coke:

A)Took unfair advantage of Burger King.
B)Involved stating things known not to be true.
C)Gave a false impression.
D)All of the above

Question 42

How much did Coke pay to the employee who filed suit alleging wrongful termination?

A)$540,000:$100,000 in cash, $140,000 in benefits including health insurance, and $300,000 in lawyer's fees
B)$9,000,000 plus $300,000 lawyer's fees
C)$37,000,000 plus lawyer's fees
D)None of the above

Question 43

"Conscious parallelism" is:

A)The prices of competitors running in tandem with changes.
B)Illegal per se.
C)An issue in the vertical distribution of goods.
D)None of the above

Question 44

The criminal charges involving Peanut Corporation of America relating to Salmonella:

A)Involve both insiders and an outside food broker.
B)Are likely to be dismissed because of lack of proof.
C)Involve criminal fraud.
D)Both a and c

Question 45

How did Coke managers react when an employee brought the Boys and Girls Club issue to their attention?

A)It went to Burger King and apologized
B)It fired the employee
C)It asked the employee to conduct a complete investigation
D)None of the above

Question 46

Which of the following would not be a basis for a negligence product liability suit?

A)A recall by Toyota of certain of its cars for problems with the floor mat interfering with the driver's ability to apply the brakes quickly
B)A highly explosive gas tank installed in a car with the manufacturer's knowledge of its dangers
C)The continued sale of sunglasses to baseball teams knowing that the sunglasses were not shatterproof and had caused players eye injuries
D)All of these would be a basis for a negligence product liability suit

Question 47

Which of the following is a continuing form of tobacco regulation?

A)No-smoking ordinances
B)Requirements that tobacco companies launch "don't smoke" campaigns directed at teens
C)Prohibitions on tobacco company funding for lung cancer research
D)All of the above

Question 48

How much did the Boys and Girls Club plan increase sales in Richmond, Virginia?

A)2%
B)6%
C)10%
D)15%

Question 49

Which of the following is NOan example of an express warranty?

A)"This toothpaste makes teeth the whitest around."
B)"This water heater holds 50 gallons."
C)"Preshrunk jeans"
D)"This jacket is lined."

Question 50

Which of the following claims were made in Skecher's ads for its Shape-Up Athletic shoes?

A)"Shape up while you walk!"
B)"Get in shape without setting a foot in a gym!"
C)A promise of weight loss
D)All of the above

Question 51

The claims in the Skecher shoe ads:

A)Involved a breach of an express warranty.
B)Involved a breach of implied warranty of habitability.
C)Were not warranty claims.
D)Allowed only statutory remedies.

Question 52

How did Coke get better numbers in the test market?

A)It seasonalized the numbers
B)It altered the numbers
C)A marketing consultant used the Boys and Girls Clubs to get customers into Burger King to buy Frozen Coke value meals
D)Its own employees bought Frozen Coke value meals

Question 53

Sal was at home going through his normal workout when he bent his barbell bar.Sal is a professional bodybuilder.Sal went to his local sporting-goods store and was approached by a clerk wishing to assist him.Sal told the clerk about his problem and the clerk asked Sal to wait while an appropriate bar was located.The clerk presented Sal with a bar that the clerk said "is just what you need for your type of weight requirements." Sal paid for the bar and was returning home when he stopped at a health food restaurant.The drink that he ordered had an unusual taste, but the food establishment refused a refund.Sal became ill from the drink, which, as it turned out, had a toxic substance in it.Sal had to be hospitalized.When Sal was able to work out again, he attached the weights to the new bar and lifted the bar under his chin.The bar snapped in the middle and severely cut Sal.Sal is angry about the drink and the barbell. With regard to the barbell bar:

A)Sal is not entitled to any recovery for his injury or the broken second barbell because he did not buy all of the components, including the weights, from the same store.
B)Sal is not entitled to any recovery for his injury or the broken second barbell because he is knowledgeable himself in weightlifting and should have known which barbell to use.
C)Sal is entitled to recovery because there has been a breach of an express warranty.
D)Sal is entitled to recovery because of the warranty of fitness for a particular purpose.

Question 54

Who is Matthew Whitley?

A)The account manager for Burger King
B)The Coke retail vice president
C)A Coke employee who questioned the invoices from the marketing consultant
D)CEO of Coke

Question 55

Why did Audi enter into a settlement with 8 Mile and Eminem?

A)Audi had copied the color scheme on one of Eminem's CD covers
B)Audi had run an ad with the look and feel of Chrysler's "Lose Yourself" ad
C)Audi had used Eminem's photo in one of its ads
D)None of the above

Question 56

At the heart of the Marsh McLennan mess was:

A)Price-fixing.
B)Insider trading.
C)Conflicts of interest.
D)Both a and c

Question 57

Which of the following categories was involved in the Skecher's ads for its Shape-Up Athletic shoes?

A)Saying things that are not true
B)False impression
C)Conflict of interest
D)All of the above

Question 58

Which of the following resulted from the Burger King Frozen Coke issues?

A)Coke had an earnings restatement
B)The FBI investigated Coke
C)The SEC investigated Coke
D)Both b and c
E)All of the above

Question 59

What area was picked for the test market?

A)Richmond, Virginia
B)Tallahassee, Florida
C)Atlanta, Georgia
D)Orlando, Florida

Question 60

What did Coke do to the employees involved in the Burger King/Frozen Coke activities?

A)They were terminated or resigned
B)They are still with the company, but were demoted
C)They are still with the company but lost their bonuses
D)None of the above

Question 61

Buckyballs have been:

A)Recalled and will be required to be reissued with a new warning.
B)Permanently recalled.
C)Made safer through new sizes and shapes.
D)Moved to off-shore production.

Question 62

Refer back to Unit Four and discuss why Tylenol (McNeil) behaved so differently in the quality control situation as opposed to the poisoning situation.

Question 63

What theories could the parents of a child injured by ingesting Buckyballs use for recovery of damages from the company?

A)Strict tort liability
B)Implied warranty of fitness for a particular purpose
C)Express warranty
D)None of the above because there is assumption of risk with children's toys

Question 64

Compare and contrast the cases of Peanut Corporation of America and the Tylenol Quality Control problem.

Question 65

How did McNeil resolve its problem that occurred between 2010 and 2012?

A)They are not resolved and litigation is ongoing
B)It entered into a consent decree with the FDA
C)It entered a guilty plea to violations of manufacturing standards
D)Both b and c

Question 66

Which of the following was not in the e-mails found in Peanut Corporation of America's internal e-mail system?

A)"We at least need to turn the raw peanuts on the floor into money."
B)"Clean 'em up and ship them."
C)"I can sign without running the tests."
D)"This time lapse is costing us $$$$ ."

Question 67

Stanford University medical researchers conducted a study on the correlation between the use of fertility drugs and ovarian cancer.Their study, published in the American Journal of Epidemiology, concludes that the use of the fertility drugs, Pergonal and Serophene, may increase the risk of ovarian cancer by three times.The lead author of the studies, Professor Alice Whittemore, stated, "Our finding in regard to fertility drugs is by no means certain.It is based on very small numbers and is really very tenuous."
FDA Commissioner David Kessler would like the infertility drug manufacturers to disclose the study findings and offer a warning on the drug packages.He notes, "Even though the epidemiology study is still preliminary, women have a right to know what is known.We're not looking to make more of this than there is."
If you were a manufacturer of one of the drugs, would you voluntarily disclose the study information?

Question 68

Why does the DEA want to revoke the licenses of several drug store chains to issue controlled substances medications?

A)There are too many pharmacies in Florida
B)The chains failed to establish adequate internal controls for dispensation of controlled substances
C)The chains failed to submit proper paperwork for licensing
D)Both b and c

Question 69

What problems did Tylenol experience between 2010 and 2012?

A)A phantom recall
B)Shoddy manufacturing practices
C)A drop of 55% in Tylenol sales
D)All of the above