Deck 8: Ethics and Products

Question 1

The implied warranty of fitness for a particular purpose is also known as the salesperson warranty.

Answer 1

True

Question 2

Privity of contract is required under tort law for product liability recovery.

Answer 2

False

Question 3

The implied warranty of merchantability is given in every sale of goods.

Answer 3

False

Question 4

The failure to provide adequate warnings for products can result in manufacturer liability.

Question 5

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

Question 6

Fans who paid to watch the Pacquiao-Mayweather fight were not told about Pacquiao's injury before the fight.

Question 7

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

Question 8

In the Pacquiao-Mayweather fight, the fighters both threw fewer punches than in their previous fights.

Question 9

A sample or a model is an express warranty.

Question 10

Ralph Nader changed the nature of the liability of manufacturers for their products.

Question 11

One of the FCC complaints against T-Mobile involved "bait and switch."

Question 12

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

Question 13

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

Question 14

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

Question 15

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 16

In the Peanut Corporation of America case, no senior managers were convicted of crimes.

Question 17

Wells Fargo corporate headquarters was not aware of the sham accounts problems at the branches until 2016.

Question 18

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 19

T-Mobile was not required to pay anything to settle the FTC complaints against it; it just promised to change its ads.

Question 20

One way to determine whether there are excess controlled substance prescriptions is by checking the addresses on the prescriptions.

Question 21

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 22

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 23

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

Question 24

Who said, "Why would somebody send something out that would ruin his own company"?

A) Ralph Nader
B) The owner of Bucky Balls
C) Hugh Parnell Sr.
D) None of the above

Question 25

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 26

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 27

Commissions for the sale of mutual funds vary significantly.

Question 28

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 29

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 30

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

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

Question 31

What product was Ralph Nader concerned about that led to congressional hearings on product liability and safety?

A) The Ford Pinto
B) The Chevrolet Corvair
C) The GM Malibu
D) The Ford Crown Victoria

Question 32

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 33

Incentive programs often undermine culture in organizations.

Question 34

What dictated the placement of the Pinto gas tank?

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

Question 35

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 36

Which of the following was not an issue with the FCC and T-Mobile?

A) Ads on unlimited data
B) Cell phone insurance
C) No-contract ads
D) Quality of T-Mobile phones

Question 37

The government was unable to get a guilty verdict on the Silk Road case.

Question 38

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 39

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 40

Employee surveys are a good way to determine what the company culture is like.

Question 41

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 42

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

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

Question 43

Why was Jack-in-the-Box cooking at a different temperature from other fast food chains? A) Jack-in-the-Box had higher safety standards
B) Cost
C) Jack-in-the-Box lost the memo
D) Both a and b
E) Both b and c
F) a, b, and c

Question 44

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 45

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 46

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 47

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 48

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 49

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 50

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 51

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 52

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 53

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 54

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 55

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 56

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 57

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 58

What area was picked for the test market?

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

Question 59

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 60

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

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

Question 61

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 62

To whom was President Reagan referring when he said, "You have lived up to the very highest ideals of corporate responsibility and grace under pressure"?

A) Stewart Parnell
B) Ralph Nader
C) Jim Burke
D) Lee Iacocca

Question 63

"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 64

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 65

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 66

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

Question 67

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 68

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 69

Which company responded to customer complaints and fixed its products before a regulatory agency became involved?

A) Chrysler
B) Ford
C) GM
D) Procter & Gamble

Question 70

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 71

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 72

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 73

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 74

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 75

What was not part of the alleged deception in the Pacquiao-Mayweather fight?

A) Failure to disclose Pacquiao's injury
B) Few punches thrown and landed than in previous fights
C) Use of performance-enhancing drugs by the fighters
D) All of the above were part of the deception

Question 76

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 77

Which of the following is not an 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 78

How was Peanut Corporation able to convince customers to accept product that was testing positive for salmonella?

A) Fictitious certifications
B) Assurances that Mr. Parnell was dumbfounded about the positive tests
C) That tests were completed every day at Peanut Corporation
D) All of the above

Question 79

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 80

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.