1. Which of the following is an important purpose of intellectual property rights?

• A To make new products affordable for consumers
• B To give Congress the power to decide which discoveries are useful
• C To ensure quality and efficiency in the marketplace
• D To encourage inventors to share their discoveries with the public

2. Select the true statement about the relationship between law, ethics, and business.

• A.People generally have similar opinions on what actions or conduct are called moral, and the marketplace rewards businesses that conduct themselves in such a manner. B.The marketplace is generally unconcerned with whether or not businesses conduct themselves morally, since morality is difficult to define. C.Each person has a different definition of what is moral or ethical, so it is not possible for businesses to know what qualifies asethical conduct. D.Since morals and ethics are not objective and cannot be specifically measured, the relationship between the value of a business and its ethical conduct is murky at best.

3. Wanda's financial advising firm wants to know the private client list held by a competing firm in town. Wanda sets up a meeting with an employee at the rival firm, and while there, Wanda downloads the client list to a flash drive when the employee steps away from his office. Three days later, Wanda uses the flash drive to open the client list. Does Wanda's conduct violate trade secret law?

• A. No, because the firm with the private client list failed to keep it a secret.
• B. Yes, because the method by which Wanda discovered the trade secret is illegal according to trade secret law.
• C. No, because trade secret protections disappear when a trade secret is discovered.
• D. Yes, because Wanda did not pay the rival firm for its client list.

4. Select the example that is inconsistent with the provisions of the UCC for contract remedies for a seller's breach of contract.

• A.The sales contract for a lumber mill that sells building materials includes a liquidated damages clause for the amount of $50 million in the event of a breach of contract.
• B. In its sales contract, amaker of musical instruments gives buyers a maximum of two years to raise any concerns relating to breach of contract.
• C.The sales contract for a swimming pool supply store allows for a single remedy for any contract breaches.
• D.The sales contract for a consumer electronics company excludes specific performance as a remedy for non-delivery of items ordered by the buyer, but it allows for refunds.

5. Which of the following is true of agency relationships?

• A.Agency relationships are created for an agent to act as an intermediarybetween a principal and a third party.
• B>Agency relationships are created for a third party to act as an intermediarybetween an employee and an agent.
• C.Agency relationships arecreated for a principal to act as an intermediary betweenan agent and third party.
• D.Agency relationships arecreated for an agent to act as an intermediarybetween a principal and an employee.