In Which One of the Following Situations Is the Principal

question 144

Multiple Choice

In which one of the following situations is the principal not responsible for the conduct of his agent?

• A) When selling vacuum cleaners for Ace Vacuums Ltd., Joe lied to the customer about the qualities of the vacuum being sold. He was an independent agent.
• B) When selling vacuum cleaners for Ace Vacuums Ltd., Joe lied to the customer about the qualities of the vacuum being sold. He was an employee of Ace.
• C) In his job selling vacuum cleaners for Ace Vacuums Ltd., Joe drove his car carelessly and hit a pedestrian on his way to deliver a vacuum cleaner to a customer. He was an employee of Ace.
• D) In his job selling vacuum cleaners for Ace Vacuums Ltd., Joe drove his car carelessly and hit a pedestrian on his way to deliver a vacuum cleaner to a customer. He was an independent agent.
• E) When driving the employer's car to sell vacuums to a customer, Joe hit a pedestrian. Joe was an employee.

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Definitions:

Holding Cost

The expenses associated with storing unsold goods, including warehousing, insurance, and depreciation.

Cycle Inventory

The portion of inventory that is replenished regularly based on the demand and supply cycle of the business.

Cycle Inventory

The quantity of inventory available to meet normal demand between shipments in a replenishment cycle.

Supply Chain

A network of organizations, people, activities, information, and resources involved in producing and delivering a product or service from supplier to customer.