MGMT 520 Midterm Exam

DeVry MGMT 520 Midterm Exam
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1. Question : TCO B. Infuriated when Harry Reid is re-elected during the 2010 fall election, the
Republicans in Congress decide to take matters into their own hands. In 2011, the House of
Representatives passes a new “Freedom isn’t Free Act” that requires that anyone who wants to vote in
the 2012 presidential election must prove that they paid at least $200 in federal income tax in the past
year, including people aged 18 (who typically are deducted on their parents’ returns and do not pay
income tax). Anyone who received the “earned income credit” is barred from voting unless they return
the payment from the government. Proof of payment of the tax can be made by showing a copy of the
prior year’s W2, a copy of the prior year’s tax return, or a signed statement from the IRS stating that the
payment of more than $200 in federal income tax has been made. Citizens who do not pay taxes can still
vote if they donate $200.00 to the federal government as voluntary income tax and get a statement
from the IRS that they have done so. The law sunsets on December 31, 2012. List two bases under which
someone impacted by this law could argue to have the law overturned.
2. Question : TCO F. When Vanna White sued Samsung for appropriation and under the Lanham Act, she
won her case under the California common law right of publicity claim and under the Lanham Act. List
the eight Sleekcraft factors that are required to prove a Lanham Act complaint.
3. Question : (TCO C) Bud Johnson owns a General Motors dealership in Pierre, South Dakota. At the
request and expense of General Motors, Bud traveled to Phoenix, Arizona, for purposes of the
demonstration of a new vehicle called the Roughrider, designed to compete against the current offering
of SUVs. Bud went to the proving grounds in the desert around Phoenix and spent a day watching the
vehicle demonstrations. Bud and other dealers drove the vehicles, and much dust resulted from their
driving. A few weeks later, Bud became ill with flu-like symptoms. He was finally diagnosed as having
coccidioidomycosis or “valley fever.” Valley fever is a disease well known to Arizona residents, and most
have had it if they have lived there over 10 years. Newcomers are particularly vulnerable to the disease
because the exposure to dust seems to build up immunity among the residents.
Bud became quite ill and brought suit against the car manufacturer that invited him for its failure to
warn him about the valley fever phenomenon before he came out to the testing grounds. Answer the
following questions, and use cases and theories from the text to support your arguments:
Was there negligence in the failure of General Motors to warn Bud? (15 points)
Discuss all defenses General Motors may have. (15 points)
Does strict liability in torts apply to this situation? Why or why not? (10 points)

4. Question : TCO D: Barney and his 16-year-old son BamBam are riding in Fred’s car. Fred had taken
some prescription medication that morning that stated on the bottle, “Warning, may cause drowsiness.”
The truck in front of them suffers a blow-out, and swerves uncontrollably. The tire remnants fly into the
road, Fred swerves and hits a car to his left. He avoids hitting the truck with the blow-out but suffers
damage to the left side of his car. BamBam hits his head on the side of the car, getting a concussion and
permanently losing the sight in his right eye. Fred has state law required auto insurance with the
minimum policy limits.
Fred’s wife, Wilma, immediately calls Betty, BamBam’s mom, and apologizes when she finds out about
BamBam losing his eye. Wilma says to Betty, “Please don’t worry. We will pay for anything the insurance
doesn’t cover, including the loss of BamBam’s sight and anything else he needs to recover and live a
normal life.” Betty sobs and says, “You are too good to us. We can’t accept that.” Wilma says, “Of course
you can.” Betty cries harder and says, “Thank you so much but (unintelligible)” and hangs up.
Fred and Wilma own a house worth $450,000, a car worth $20,000, a full-size T. rex skeleton for which a
museum has offered $200,000 in the past, and some stocks and bonds worth $700,000.
A lawsuit ensues and a judgment against Fred and for BamBam is entered for $300,000. The insurance
company paid their cap of $250,000, leaving $50,000 remaining due. Fred and Wilma immediately pay
BamBam $50,000. Further, Wilma buys a designer eye-patch for BamBam made specifically by Calvin
Klein with a picture of Fred and Wilma’s daughter, Pebbles, on it. Wilma hugs BamBam when she brings
over his new eye patch and says, “Anything. Anything you need. We will take care of it for you.” Fred
rolls his eyes at Barney, and Barney sighs and shakes his head. Betty and Wilma both cry at how
adorable BamBam looks with his new eye patch. Barney buys BamBam a new car, specially designed for
people with one eye. Wilma finds out and calls Betty, asking how much the car was. Betty says they are
making payments on the car of $450/month for the next 4 years. Wilma writes Betty a check for $450,
and sends her one every month for the next 8 months.
Eight months after the judgment was rendered, BamBam is discovered to have more damage to his
head than originally thought. He loses sight in his other eye and now is totally blind. BamBam’s parents
sue Fred and Wilma again for personal injury, but the case is thrown out as the first case already decided
the injury case. Fred refuses to pay more to BamBam, and he takes the checkbook away from Wilma
when he discovers she’s been making BamBam’s car payments. The two families stop speaking to each
other. BamBam throws away his now useless eyepatch and becomes despondent. His dreams of being a
drag racer seem to be over. BamBam’s attorney refiles the case, this time on grounds that Wilma’s
statement to Betty was a binding contract that requires that Wilma pay any remaining damages to
BamBam, for the remainder of his life.
Was Wilma’s statement a binding contract? Using the law of contracts, explain why or why not. Does
BamBam’s age have anything to do with your answer? Can Fred be bound by the potential contract
Wilma may have entered into? Use the law of agency to explain your answer to that question. Did
Wilma’s purchase of the eye-patch give BamBam a greater leg to stand on in court? What about the car
payments she made? Explain fully your answer to these questions.
5. Question : TCO I. Marianne Jennings wrote an article, “Why an International Code of Ethics would be
good,” which was assigned to be read at the beginning of the course. As you have worked throughout
this session, you should have considered this article and how it may or may not have impacted different
situations in the world economic/business/legal/political environments. The essay you will write on the
next question should show that you have read Marianne’s article and can apply her theories and
thoughts from that article to the scenario provided. Feel free to rely on the information you know about

the situations (if real) or analogize to another one, if you wish. Include in your answer at least two
specific concepts from Marianne’s article, and apply those concepts to your reasoning in your answer.
You will be graded on your knowledge of the article as well as the application of ethical theories to
international situations.
An oil travesty has occurred. In the Gulf Coast, British Petroleum’s deep-sea oil well has had a major
malfunction and has exploded. The explosion killed many oil workers. The oil well began spewing oil into
the Gulf, and now the entire southern portion of the United States coastal areas has been destroyed.
BP initially came out with advertisements using the CEO of the company apologizing and promising to
make this right for the citizens of the United States. Then, the CEO was removed by BP from working the
disaster. The crisis continues. Based on the “timing” of the crisis and resolutions that have occurred at
the time of your exam, answer the following question using the most relevant facts you know.
Using Marianne Jenning’s article, would an international code of ethics have assisted with the handling
of this crisis? Would it have helped BP avoid this crisis? Do you see this as an ethical issue? Support your
answer with concepts from her article, as well as other ethical reasons.
6. Question : TCO A. Use the fact pattern you received in the above Marianne Jennings “International
Code of Ethics” question to answer this question. Analyze and propose a solution to the problem you
received above using the Blanchard and Peale method. Show the steps, apply the facts, and provide a
proposed solution you would suggest.
DeVry MGMT 520 Midterm Exam
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