In the Text Case Mais, Et Al

question 22

Multiple Choice

In the text case Mais, et al., v. Allianz Life Insurance Company of North America, the plaintiff sued claiming the defendant was responsible for acts of its former employee, even though he was not employed by the defendant at the time of the alleged acts. Which of the following was the result?

• A) The defendant was not held liable because it had no reason to know a former employee was stealing from its clients.
• B) The defendant was not held liable because the former employee's act exceeded the scope of his employment.
• C) The defendant was not held liable because the plaintiff should have known the employee was no longer employed by the defendant.
• D) The defendant was held strictly liable because the nature of the acts involved were inherently dangerous.
• E) The defendant was held vicariously liable for the acts of its former employee because it did not notify customers that the agent had been terminated.

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Definitions:

Economies of Scale

Reductions in the average cost of a product due to increased production levels.

Diseconomies of Scale

An increase in production costs as the scale of production goes up, leading to reduced efficiency.

Fixed Inputs

Resources or factors of production, such as land or capital, that remain constant regardless of the level of output or production.

Variable Inputs

Resources or inputs whose quantity can be changed in the short term to adjust the level of production.