A corporate

culture is
fashioned by a
shared pattern
of all of the
following
except:

A) Beliefs

B) Expectations

C) Meanings

D) Bylaws

2
INCORRECT Which of these is most accurate regarding cultures in businesses?
Corporate cultures are always changing, and often change
A) rapidly.
One person, even a strong leader, can have no impact on a
B) culture.
A strong leader can have a significant impact on corporate
C) culture.
A single person alone can change the course of a corporate
D) culture.

3
INCORRECT Which of these is true regarding the corporate culture of a given firm?
A firm's culture can offer it direction and stability in challenging
A) times.
All of these statements are true regarding the corporate culture
B) of a firm.
A firm's culture can constrain it to the common ways of
C) managing issues.
A firm's culture can be a benefit or a barrier to success at
D) different times.

4
INCORRECT Collins and Porras (1994) studied many successful companies and found
that they all had what in common?

A) core ideology

B) commitment to customers

C) commitment to employees

D) risk-taking

5
INCORRECT Your text's author contrasts FEMA and the Coast Guard in discussing
Hurricane Katrina emergency relief. Which point does he make to
 account for their different responses?

A) FEMA and the Coast Guard are two very different organizations.
FEMA and the Coast Guard have very different missions and
B) rules.

C) FEMA and the Coast Guard have very different legal regulations.

D) FEMA and the Coast Guard have very different agency cultures.

6
INCORRECT Which of these is not a requirement of internal mechanisms for reporting
wrongdoing within an organization?

A) They must be effective.

B) They must allow anonymity.

C) They must report to legal authorities.

D) They must protect the rights of the accused.

7
INCORRECT Which of these is true regarding assessment and monitoring of the
ethics of a corporate culture?
Ongoing ethics audits can uncover silent vulnerabilities that
A) could later challenge the firm.
Ongoing ethics audits can serve as a vital element in risk
B) assessment and prevention.
Ongoing ethics audits can enable organizations to spot weak
C) areas before other stakeholders (internal and external can spot
them.
Ongoing ethics audits can and do serve all of these functions
D) within an organization.

8
INCORRECT Which of these is not a correct representation of one of the USSC's eight
minimum requirements of an effective ethics and compliance program?

A) Establishing standards and procedures for compliance

B) Establishing a board or body to govern the program

C) Establishing one individual to govern the program

D) Establishing one individual to oversee compliance

9
INCORRECT Which of these is not a correct representation of one of the USSC's eight
minimum requirements of an effective ethics and compliance program?
Delegating important responsibilities randomly to ensure equal
A) opportunities
Communicating the program effectively and training all
B) employees and agents
 Monitoring and auditing program operation for effectiveness and
C) for violations
Establishing incentives for compliance and consistent discipline
D) for violations

Select the
statement that
does not
represent one
of the common
aspects of the
contemporary
work scene:
Workers have significant choices and alternatives open to them
A) in the workplace.
More jobs today are temporary, part-time, or subcontracted out
B) to third parties.
Most workers will likely have no more than one or two jobs in a
C) lifetime.
The social values of work such as camaraderie and social status
D) are lost to part-time and temporary workers.

2
INCORRECT The classical interpretation of work is best described by:

A) Humans are intellectual, yet work is physical.

B) For cultured and civilized people, work is undignified.

C) Humans are free beings; work is a necessity.

D) Work diminishes human nature and human potential.

E) All of the above.

F) None of the above.

3
INCORRECT Which of these statements does not describe the hedonistic
interpretation of work?
Work is the price we pay to get the necessities of life and other
A) things that make life pleasurable.

B) Happiness is the enjoyment of cultural activities.

C) There is no specific content for human happiness.

D) Individuals are allowed to choose whatever ends they desire.

4
INCORRECT Which statement about the issues confronting business ethics in its
effort to articulate the type of work than can foster the full development
of human potential is not true:
Not every job contributes to the development of human
A) potential.
The proper kind of workplace contributes to human
B) development.
Jobs do not have the potential for influencing and shaping
C) individuals.

D) Individuals exercise control over jobs.

5
INCORRECT A true expression of Marx's concept of alienation is:

A) Alienation is the result of low wages.

Alienation is the result of work that prevents the full
B) development of human potential.
Alienation means the separation and distinction of one social
C) class from another.
The capitalistic system does not inevitably mean a life of
D) alienation for workers.

6
INCORRECT Select the statement that fails to describe the human potentials that
work can fulfill:
Work provides the occasion for developing talents and
A) exercising creativity.
Through work, humans create their own society and culture and
B) thereby their own identities.

C) Work expresses our nature as social beings.

Work allows us to experience our freedom and autonomy in
D) making choices and directing our lives.

E) All of the above.

F) None of the above.

7
INCORRECT Indicate the statement that is not consistent with Bowie's liberal theory
of work:
One of the moral obligations of a firm is to provide meaningful
A) work.
It is a simple enough task to find a justification for any
B) objective, normative definition of meaningful work.
Meaningful work defined as nothing more than what employees
C) say it is, is a subjective and individualistic definition of work.
The more people are compelled to work, the greater the
D) responsibility to make sure that workplace conditions are as
humane as possible.

8
INCORRECT How might a liberal have to respond to the suggestion that some
 workers might prefer to work at highly routine, unchallenging, and
boring jobs?

A) Employers have no choice but to eliminate these jobs.

B) Employers have no obligation to eliminate these jobs.

These jobs do not necessarily suppress the human faculties of
C) rational and autonomous choice.
While it may be true, on the one hand, that as long as no one is
D) forcing employees to do these jobs, employers don't have to
eliminate them, it is also true that accepting the ethical
legitimacy of these jobs violates the fundamental values of
rational and free choice.

Moral Rights in the Workplace

Which of the
following
goods are
removed from
the
employment
contract by
legal rights?

A) Wages and benefits.

B) Wages set at less than the legal minimum wage.

C) Working conditions.

D) Agreements on productivity standards.

2
INCORRECT Which of the following moral rights could be waived in order to get a job
or an increase in employment benefits?

A) Protection against sexual harassment.

B) A safe and healthy workplace.

C) Wage levels required for a decent, humane level of existence.

D) Plans for a family.

E) All of the above.

F) None of the above.

3
INCORRECT Identify the proposition that challenges the argument for mandatory
union membership:
Mandatory union membership allocates the benefits and
A) burdens of union membership in a fair and equal manner.
Whoever receives benefits from a process that entails costs
B) should share in the cost of providing those benefits.
 Bargaining between employer and employees will be equal only
C) if the employees bargain for wages and benefits as individuals.
Bargaining between employer and employees will be equal only
D) if the employees bargain for wages and benefits collectively.

4
INCORRECT Determine which statement defends the idea that private employers do
not have an obligation to provide jobs for others:
Everyone needs a job to be able to satisfy his or her
A) instrumental and psychic needs.
The economic system of a society exists, fundamentally, for the
B) well-being of that society's members.
Employers have rights, although limited, to property and also
C) have their own right to work.
If citizens have a right to a job to fulfill their instrumental and
D) psychic needs, then some public institution has the obligation to
provide those jobs. Private employers can fulfill that obligation
more efficiently than government.

5
INCORRECT Select the statement or statements that represent an erosion of
employment at will as a legal doctrine:
Federal and state constitutions grant employees rights against
A) the government as their employer.
Union employees are protected from arbitrary dismissal by their
B) union contracts.
Civil rights laws protect employees from being fired because of
C) race, or sex, for example.
Federal and state laws protect employees who blow the whistle
D) on certain illegal or unethical acts committed by their
employers.

E) All of the above.

F) None of the above.

6
INCORRECT A procedural account of due process would preclude:
prior warnings, documentation, and written performance
A) standards;
a list specifying beforehand every possible reason for dismissal
B) and distinguishing them from unacceptable reasons;

C) probationary periods;

D) an appeal process and an opportunity to respond to allegations.

7
INCORRECT Which statement fails to provide a valid reason in support of John
McCall's claim that employees have a right to participate in management
decisions?
Human dignity is tied to the ability of humans to guide their
A) own lives and control their own destinies.
Fairness demands that each and every person affected by a
B) managerial decision must have an opportunity to represent his
 or her own interests.
Employees who participate in and contribute to decision making
C) are less likely to suffer alienation and burnout.

D) None of the above

8 CORRECT
Select the statement that might represent a valid objection to worker
participation in management decisions:
Private owners have property rights that include the right to
A) manage and direct the business.
Workers lack the expertise and knowledge to manage a
B) business.
Substantial conflicts that exist between the interests of the firm
C) and the interests of the employees are more likely to occur than
similar conflicts between the interests of managers and the
interests of the firm.
Any attempt to involve employees in decision making will be
D) inefficient.

9
INCORRECT According to the free market and classical models of corporate social
responsibility, individual bargaining between employees and employers
would be the best approach to workplace health and safety. Which
statement does not support that approach?
Employees are perfectly free to decide what level of risk they
A) are willing to accept for a corresponding level of wages.
In a competitive free market, individual bargaining would result
B) in the optimal distribution of safety and incomes.
The means the market uses to gather information about risks is
C) to observe the harms done to the first generation exposed to
imperfect market transactions, market failures.
The threat of compensatory payments acts as an incentive for
D) employers to maintain a reasonably safe and healthy
workplace.

10
INCORRECT Select the statement that does not reflect the connection between the
two senses of privacy as a right to be "left alone" and privacy as a right
to control information about oneself:
Certain decisions we make about how we live our lives play a
A) crucial role in defining our personal identity.
Privacy establishes the boundary between individuals and
B) thereby serves to define one's individuality.
The right to control certain very personal decisions and
C) information has little relevance to determining the kind of
person we are and the person we become.
To the degree that we value treating each person as an
D) individual we ought to recognize that certain personal decisions
and information are rightfully the exclusive domain of the
individual
Ethical Responsibilities in the Workplace

Which of the
following
aspects of the
relationship
between
Enron's special
purpose
entities (SPE's)
and Enron
itself is not
particularly
egregious?
Enron had no reason for forming SPE's other than to create a
A) deceptive impression that it was in better financial shape that it
actually was.
Hedging risks by entering into agreements with oneself does
B) not lower risks.

C) Underwriting one's own risks is not underwriting them at all.

Using Enron's own stock to finance the SPE's provided a very
D) strong incentive for Enron management to keep its stock value
high.

E) All of the above.

F) None of the above.

2
INCORRECT Which statement is not true of the agency concept?

A) In actual fact, not all agents are employees.

Under the common law tradition of the United States, all
B) employees are treated as agents of employers.
The primary responsibilities in the employer-agent relationship
C) lie with the employer.
The law has described the employee-employer connection as a
D) master-servant relationship.

3 CORRECT
Select the statement that does not support the narrow view of non-
managerial employees' responsibilities to their employer, the idea that
the employer exercises a great deal of control over the nature and terms
of employment with very little discretion given to the employee:

A) Employees consent to obeying managers when they take a job.

Employees who agree to obey employers are not truly
B) abandoning their own responsibility.
The choice of obeying someone's command or
C) jeopardizing one's job is a fundamentally coercive
situation and, therefore, the consent involved is not fully
free.
Owners have property rights and have to be protected against
D) the harms they might suffer from employees.
4
INCORRECT Identify the statements that reflect the varied owner interests corporate
managers are supposed to serve:
Identify the statements that reflect the varied owner interests
A) corporate managers are supposed to serve:

B) Investors are playing the stock for short-term gain.

Investors see their stock ownership as an investment in a
C) company and its technology.
Investors see their stock ownership as a long-term investment
D) for personal retirement and security.

E) All of the above.

F) None of the above.

5
INCORRECT Which statement describes a managerial action that does not unethically
impose costs upon stockholders and other stakeholders?
The action imposes unwanted costs on stockholders and
A) stakeholder by giving up some alternatives in favor of others in
the interest of maintaining the fiscal stability of the enterprise.
A personal interest of a manager hinders the exercise of his or
B) her professional judgment.
A portion of some payment is kicked back to the payer as an
C) incentive to make the payment in the first place.
Financial advisers receive payments from a brokerage house to
D) pay for research and legal services that should be used to
benefit the advisers' clients, not the advisers' personal
interests.

6 CORRECT
Select the statement that, ethically speaking, best represents a valid
concept of what loyalty to a firm means:
Loyalty means a willingness to sacrifice one's own interest by
A) going above and beyond ordinary employee responsibilities.
Loyal employees are expected to sacrifice for the firm even
B) though the firm is not necessarily bound to sacrifice for the
employee.
Since the model of agency law lays a legal duty of loyalty on
C) employees, employees clearly have a corresponding ethical
responsibility to be loyal.
While a willingness to sacrifice might be a part of loyalty, it
D) would seem that devotion and faithfulness to a common good is
both more essential to loyalty and what explains the willingness
to sacrifice.

7
INCORRECT Identify the statement that challenges Albert Carr's analogy that, like
poker, business is a game that has its own rules and, therefore, is
exempt from ordinary requirements of morality:
Carr overestimates the prevalence and acceptability of
A) dishonesty within business.
 Even if business did have its own set of ethical conventions,
B) that fact alone does not exempt it from ordinary ethical
evaluations.
There are major disanalogies between business and games like
C) poker that weaken the conclusions drawn from Carr's analogy.
Unlike poker games, individual often have no choice but to
D) participate in business practices.

E) All of the above.

F) None of the above.

8
INCORRECT According to Richard DeGeorge, which statement presents a condition
that makes blowing the whistle on a company not just permissible but
obligatory?

A) A threat of serious harm exists.

The whistleblower has exhausted all internal channels for
B) resolving the problem.
The harm to be prevented overrides the harm done to the firm
C) and to other employees.
The whistleblower has good reason to believe that blowing the
D) whistle will prevent the harm.

9
INCORRECT Select the statement that is not a criticism of insider trading:
The insider benefits inappropriately by buying or selling the
A) stock at a price below or above what the market will demand
when the inside information is made public.
An insider can benefit by trading on bad news as well as good,
B) and this might be an incentive to work against the firm's best
interests.
The insider's action sends the correct message to the market,
C) reflecting the stock's true value, moving the market toward
equilibrium.
The insider's information is often used without the firm's
D) permission in a way that harms the stockholder's interests.

Marketing Ethics: Product Safety and Pricing

Which ethical
question is not
relevant to the
process of
marketing a
product?
What responsibility do producers have for the quality and safety
A) of their products?

B) Who is responsible for harms caused by a product?

 Is the customer's willingness to pay the only ethical constraint
C) on fair pricing?
Can producers discriminate in favor of, or against, some
D) consumers?

E) All of the above.

F) None of the above.

2
INCORRECT Identify the statement that fails to reinforce the idea that the purchases
made by consumers may not be truly voluntary:
The more consumers need a product, the less free they are to
A) choose.
The consumer may experience anxiety and stress, e.g., when
B) purchasing an automobile.
Price-fixing and price-gouging may restrict the consumer's
C) freedom.
There may be marketing practices aimed at vulnerable
D) populations such as children or the elderly.

E) All of the above.

F) None of the above.

3
INCORRECT Select the statement that represents a situation where informed consent
is not operative:
The complexity of a product has been fully explained to a
A) consumer.
The customer is not clear about the calculation of the interest
B) rate on a leased product transaction.
The extended warranty conditions on a product have been fully
C) disclosed to a consumer.
Warning labels on a product have pointed out any potential
D) hazards associated with operating it.

E) All of the above.

F) None of the above.

4
INCORRECT Choose the statement that does not challenge the assumptions
commonly found in economic textbooks that customers are benefited,
almost by definition, whenever their preferences are satisfied in the
market:
Impulse buying cannot be justified by appeal to consumer
A) interests.
The exchange is prima facie ethically legitimate because it
B) assumes that the individuals involved in the transaction act as
free, autonomous agents capable of pursuing their own ends.
The ever-increasing number of bankruptcies suggests that
C) consumers cannot purchase happiness.
Empirical studies provide evidence that greater consumption
D) can lead to unhappiness.
5 CORRECT
Select the question that is most likely never relevant to the examination
of business' responsibility for its products:

A) What caused an event to happen?

B) Who is to blame for any harms caused, who is liable?

C) What was the agent's motive?

Who was responsible for "caring for" a situation, accountable
D) without any suggestion of culpability, fault, or blame?

6
INCORRECT The strict products liability standard requires a manufacturer to
compensate injured consumers:
Only if it can be shown that the manufacturer was at fault in
A) causing or failing to prevent a harm.
Even if the manufacturer was not at fault, even if there was
B) nothing the manufacturer could have done to prevent the harm.
Only if the manufacturer used fraud or coercion at the time the
C) contract for the product was agreed to by the consumer.
Only if the product's features were described in a deceptive
D) manner in advertising copy.

7
INCORRECT Select the statement that doesn't challenge the claim that producers
should not be held strictly liable for harms not caused by their
negligence:
Strict liability adds significant hidden costs to every consumer
A) product.
Strict liability places domestic producers at a competitive
B) disadvantage with foreign businesses.
If it is unfair to penalize businesses for harms they couldn't
C) prevent, it is equally unfair to penalize consumers for harms
they could not prevent.
Strict liability discourages product innovation and encourages
D) frivolous and expensive lawsuits.

8
INCORRECT Identify the statements that George Brenkert claims represent
justifications that juries use to hold manufacturers strictly liable but that
are not fully convincing:
The consumer who is injured by a product is unfairly
A) disadvantaged in the economic competition and is denied an
equal opportunity to compete in the marketplace.
Manufacturers are best able to pay for the damages caused by
B) their products.
Compensation returns the parties to equal standing and the
C) economic competition can continue as a result.
Strict liability creates an added incentive for producing safe
D) products.

E) A and C.

F) B and D.
9
INCORRECT It is alleged that markets fail, in some situations, to insure a fair price
and thereby limit consumers' freedom. Which statement does not
support that allegation?
Sellers extract extraordinarily high prices in situations where
A) consumers have few options for obtaining a needed product.
From the utilitarian perspective, consumers are always
B) benefited by low prices and balancing the benefits to buyers
from low prices with the benefits to sellers of high prices is the
only ethical pricing issue.
Monopolistic pricing limits the variety of products available to
C) consumers.
The more uniformity of prices one finds within an industry, the
D) less likely it is that competition exists.

10
INCORRECT Select the statement that is at odds with the idea that pricing strategies
may be unfair:
Large stores in competition with smaller stores can absorb
A) losses from undercutting the smaller stores on price, an option
not available to the smaller ones.
Distribution systems are established that reward large retailers
B) with lower costs per unit than the cost per unit smaller stores
must carry.

C) As a result, the smaller ones may be driven from the market.

A competitive market should drive out uncompetitive firms by
D) driving prices down.
Government subsidies of one industry may keep alternative
E) industries from competing on price.

Marketing Ethics: Advertising and Target Marketing

Identify the
statement that
provides a
reason why
manipulation
of consumers
is not relevant
to marketing
ethics:
Knowing consumers' psychological profiles through marketing
A) research, their motivations, interests, desires, beliefs, anxieties
and fears facilitates manipulation of their behavior.
Some marketing practices target populations that are
B) particularly susceptible to manipulation and deception.
One need not necessarily deceive a person in order to
C) manipulate him or her.
Manipulation doesn't necessarily entail total control over a
D) person; it may simply be a process of subtle direction or
management.

E) All of the above.

 F) None of the above.

2
INCORRECT Select the practice that is not a form of consumer manipulation:

A) Cigarette advertising aimed at children.

Ads aimed at elderly population for such goods as medicare
B) supplementary insurance, casinos and gambling, nursing
homes, and funeral services.
Researching the criteria that a typical buyer uses to select a
C) particular make and model of automobile.
Selling an extended automobile warranty or theft protection
D) products to a customer who is anxious about the whole process
of buying an automobile.

3
INCORRECT What statement suggests that the Johnson & Johnson Tylenol ad stating
that "last year hospitals dispensed 10 times as much Tylenol as the next
four brands combined" was suspiciously deceptive?

A) It was a simple statement of a valid claim about the product.

It was an effort to call attention to the practice of selling the
B) drug to hospitals at a deep discount.
Johnson and Johnson wanted consumers to think that the
C) medical profession and hospitals believed it was the most
effective acetaminophen treatment on the market.
Johnson and Johnson wanted to show its commitment to
D) lowering medical costs to consumers.

4
INCORRECT Identify the statement that would not support the idea that determining
precise standards for what constitutes deception and how best to
regulate it is problematical:
The primary ethical wrong is in the intent to deceive, to intend
A) to use someone's buying behavior for one's own ends. To
prevent this wrong from occurring, the Federal Trade
Commission (FTC) would have to punish on the basis of what it
thinks a marketing practice will do to consumers rather that
what it actually does to them.
It is enough to prevent beforehand harms that deceptive
B) practices might do rather than regulate them after the harms
have been done.
Regulation might be too strong because it may well turn out
C) that consumers are deceived by relatively trivial marketing
practices.
Regulation might be too weak if it places the burden on
D) consumers to prove the deception.

5
INCORRECT Select the statement that correctly describes the dependence effect
derived from John Kenneth Galbraith's ideas on consumer affluence:
Consumers depend on the free market to learn about the
A) products they may need and want.
 Supply follows and depends on demand; consumers are only
B) getting what they want.
Consumer demand depends on what producers have to sell.
C) Demand is a function of supply. Advertising creates wants.
Owners of productive capital depend on giving consumers what
D) they want; otherwise they would lose their investment.

6 CORRECT
If consumers are being manipulated by advertising, what are some key
ethical implications?
Individual autonomy, the central element of Kantian respect for
A) persons, would be violated by the creation of wants.
If consumers pursue trivial and contrived products, market
B) exchanges only appear to increase overall satisfaction.
Consumer autonomy is violated by advertising's ability to create
C) nonautonomus desires.

D) The economy of the affluent society is contrived and distorted.

E) All of the above.

F) None of the above.

7
INCORRECT Identify the statement that does not challenge Robert Arrington's
argument that because marketing doesn't prevent us from renouncing
our pre-existing and independent choices, our desires for them must be
considered autonomous:
Gerald Dworkin's point that if an individual does not or cannot
A) rationally reflect on a first-order desire (one he or she just
happens to have at any time), then the fact that he or she
doesn't renounce it does not prove conclusively that it is an
autonomous desire.
Dworkin's further claim that autonomy is a second-order
B) capacity of persons to reflect critically on first order preferences
and the capacity to accept or change them in the light of higher
order preferences and values.
Roger Crisp's claim that we need to know why a first-order
C) desire is accepted, and if not renounced, if it is indeed
independent from, say, advertising.
Even if some consumer choices are not autonomous, nothing in
D) Dworkin's or Crisp's analysis shows that advertising is
responsible for violating autonomy, only that some consumers
do not act in a fully self-conscious way.

8 CORRECT
Select the statements reflecting the general sense of vulnerability that is
relevant to target marketing:
A person is vulnerable as a consumer because he or she is
A) unable in some way to participate as a fully informed and
voluntary participant in the market exchange.
A person is vulnerable because he or she is the typical customer
B) for a particular product.
A person is vulnerable because he or she is susceptible to some
C) physical, psychological or financial harm other than the financial
harm from an unsatisfactory market exchange.
 A person may be seen as vulnerable because he or she belongs
D) to some ethnic group, or is poor, or is a resident of a particular
neighborhood.

E) A and D.

F) A and C.

9
INCORRECT Which of the following examples are ways in which persons are
vulnerable as consumers because they are vulnerable in some more
general sense?
Elderly persons vulnerable to injuries and illnesses might be
A) compelled to make consumer choices based on fear or guilt.
A grieving family member might make choices for funeral
B) services based on guilt or sorrow.
An inner-city resident who is poor, uneducated, and chronically
C) unemployed is unlikely to weigh the consequences of using
drugs or alcohol.
A person afflicted with a medical condition or disease might feel
D) fear associated with the condition that can lead to uninformed
consumer choices.

E) All of the above.

F) None of the above.

10
INCORRECT Select the statements that challenge the idea that marketers cannot be
held liable for decisions that any individual makes:
Marketing addresses populations, not, as sales do, individuals,
A) so no direct causal connection can be demonstrated between a
marketing campaign and an individual's choices to buy a
product.
If marketing is ineffective in influencing consumer choice, the
B) marketers selling their services to businesses are committing
fraud.

C) Any individual may choose not to buy a marketed product.

If marketing is effective and does influence consumer choices, it
D) cannot disavow responsibility for the consequences of those
choices.

E) B and D.

F) A and C.

Select the
statements
that do not
express a good
reason for
preserving
biological
diversity
among both
plant and
animal
species:
Lost diversity among crops makes food production more prone
A) to disease and weather-related failures.
Plant diversity holds great promise for research into medicine
B) production.
Plant diversity holds great promise for research into food
C) production.

D) Biodiversity contributes to healthier ecosystems.

E) All of the above.

F) None of the above.

2
INCORRECT Select the statement challenging the view that from a strictly free
market perspective, resources are "infinite":
Human ingenuity and incentive has always found substitutes for
A) any shortages.
As the supply of any resource decreases, the price increases
B) and provides a strong incentive to supply more or provide a less
costly substitute.

C) All resources are fungible, i.e., can be replaced by substitutes.

Trading certain environmental goods like rhinoceros horns, tiger
D) claws, elephant tusks, and mahogany on the black market
seriously threatens their viability.

3
INCORRECT Identify the perspective that, if true, would challenge Mark Sagoff's
argument against the use of economic analysis as the dominant tool of
environmental policymakers:
Economics can only deal with wants and preferences because
A) these are what get expressed in an economic market.
Even though wants and beliefs are in different categories,
B) markets can measure the intensity of our wants by our
willingness to pay, and that fact, by extension, provides a
measurement as well for our beliefs or values.
When economics is involved in environmental policy, it treats
C) beliefs as if they are mere wants and thereby seriously distorts
the issues.
Wants are personal and subjective, while beliefs are subject to
D) rational evaluation. When environmentalists argue for
preservation of a forest, or species, or ecology, they are stating
convictions about a public good that can be accepted or
rejected by others on the basis of reasons, not on who is most
willing to pay for it.

4 CORRECT
Market analysis as applied to issues of the environment is ineffective
 because:

It treats us always as consumers, not as citizens, threatening

A) our political process. It leaves no room for debate, discussion,
or dialogue in which to defend our beliefs with reasons.
The market ignores the fact that we are "thinkers," not just
B) "want-ers," and reduces our beliefs and values to mere matters
of personal taste and opinion.
As Mark Sagoff points out, environmental goals are views and
C) beliefs that cannot be priced by markets or economic analysis.
Our political system leaves room for both personal and public
D) interests.

E) All of the above.

F) None of the above.

5
INCORRECT Select the statement that does not challenge the Mark Sagoff-Norman
Bowie approach which holds that absent consumer demand or a law that
establishes environmental policy, business has no particular
environmental responsibility:
This approach underestimates the influence that business can
A) have in establishing the law.
The side constraints of law are a highly effective tool for
B) controlling managerial decisions that might affect the
environment.
Norman Bowie's proposed obligations on the part of business to
C) refrain from using its influence to shape environmental
regulation is a praiseworthy proposal but it's unlikely to have
any political effect.
This approach underestimates the ability of business to
D) influence consumer choice.

6
INCORRECT Choose the statement that defenders of the circular flow model which
explains the nature of economic transactions in terms of a flow of
resources from businesses to households would agree with:
The services that resources yield can be provided in many ways
A) by substituting different factors of production and are,
therefore, infinite.
The possibility that the economy can grow indefinitely to keep
B) up with significant population growth is ignored by this model.
If resources are moved through the classical model of a
C) productive system at a rate that outpaces the productive
capacity of the earth or the earth's capacity to absorb wastes
and by-products of the system, the entire classical model will
prove unstable.
Many resources like clean air, drinkable water, fertile soil, and
D) food cannot, under the circular flow model, be replaced by the
remaining factors of production.

7
INCORRECT Identify the statement that does not meet Natural Capitalism's principles
for the redesign of business to meet its environmental responsibilities:
 To serve the needs of the poorest 75 percent of the world's
A) population, ecoefficient business practices focus on ways of
increasing efficiency and, therefore, decreasing resource use by
a factor of 5-10.
To serve the needs of the poorest 75 percent of the world's
B) population, the standard growth model would increase
economic growth by a factor of 5-10.
The principle of biomimicry attempts to eliminate by-products
C) once lost as waste and pollution and reintegrate them into the
production process or return them as a benign or beneficial
product to the biosphere.
Models of business as a producer of goods should be replaced
D) with a model of business as a provider of services.

Diversity and Discrimination

Select the
statement that
emphasizes
the startling
contrast
between gains
made by
women in
professional
careers and
women in
business
careers:
Women in general hold less than 5 percent of all senior-level
A) positions in major corporations.
Between 1973 and 1993, the percentage of women lawyers and
B) judges increased from 5.8 to 22.7 percent.
White men comprise 65 percent of managerial positions in
C) industry while women hold 25 percent of them.
Forty percent of native-born working women fill positions
D) classified as "administrative support" and "service" while only
16 percent of male worker fill such jobs.

2
INCORRECT Choose the statements that correctly reflect the likely utilitarian view of
preferential treatment in hiring:
Managerial discretion should be given great latitude in hiring
A) decisions.
Hiring decisions should be based on the ability of the candidate
B) to perform the job efficiently and skillfully.

C) Property rights should prevail in hiring decisions.

Consequences like the goodwill of long-term employees whose
D) families are given preference in hiring must be considered.

E) A and B

F) B and D

3
INCORRECT Identify the situation that does not show how disparate treatment can
 result from what appears to be normal and equal consideration of
candidates for a position:
Women have lower salary expectations than men. An employer
A) without bias against women might select a qualified woman for
a position just to save money.
A woman who has been hired at a lower salary than a male
B) colleague because her salary expectations were lower may
receive an equal percentage of merit pay over time but applied
to a smaller base salary than the male's.
Even if this same woman has received equal opportunity for
C) promotions as the male colleague, she may still never close the
gap between her salary level and the male's salary level.

D) All of the above.

E) None of the above.

4
INCORRECT Choose the action that exemplifies affirmative action, i.e., taking extra
steps that move beyond passive nondiscrimination:

A) Advertising in media that appeal to women or minorities.

Providing door locks on women's bathrooms and showers but
B) not on men's.
Deliberately recruiting qualified women and minority
C) candidates.
Providing special support through the human resources office
D) for women or people of color who are hired.

E) All of the above.

F) None of the above.

5 CORRECT
Select the preferential treatment policy that is likely to raise the least
serious ethical challenge:
Giving preference to otherwise qualified but previously
A) disadvantaged candidates.
Identifying members of previously disadvantaged groups in the
B) pool of qualified candidates and giving them preference in the
hiring decision.
Identifying members of previously disadvantaged groups in the
C) pool of candidates who are less qualified than white males and
giving them preference in the hiring decision.
Hiring members of disadvantaged groups with only minimal
D) consideration given to qualifications.

6
INCORRECT Identify the arguments that have not been used to support or refute the
ethical legitimacy of preferential hiring policies:

A) These policies violate the rights of white males.

These policies are obligatory means for compensating people
B) for harms they have suffered.
Such policies should be rejected because they may create more
C) discrimination as a backlash against gender or racial
 preferences.
Preferential hiring is a means of providing more role models for
D) young women and people of color.

E) All of the above

F) None of the above

7
INCORRECT Select the statement or situation that would likely not challenge the
merit argument that the most qualified candidate for a position has
earned or deserves it, and the denial of this desert is unjust:
Candidates for a job do not necessarily have a legitimate
A) expectation that hiring decisions will always be based solely on
qualifications.
The son or daughter of a high-level executive in a publicly
B) traded company receives preferential hiring treatment.
The candidate from one's own alma mater receives preferential
C) hiring treatment.
The public advertising for a position expressly states its
D) qualifications.

8
INCORRECT Choose the statement that does not support the claim that justice
requires preferential hiring and promotion to compensate people for the
harms they have suffered:
Preferential treatment equalizes the situation of unfair
A) discrimination after the fact and returns it to the point that it
would have been had discrimination not occurred.
Young white males will lose their undeserved competitive
B) advantage if society simply adopts equal opportunity policies.
Compensation is not being paid by young white males but by
C) private business or society. These white males are only being
denied the competitive advantage they previously enjoyed
something they did not deserve.
The only means to compensate for overall discrimination (e.g.,
D) in pay treatment) is to grant individual women preferential
consideration in hiring and promotion.

9
INCORRECT Select the statements that correctly reflect the Equal Employment
Opportunity Commission's guidelines defining sexual harassment:
Submission to unwelcome sexual advances, requests for sexual favors
and other verbal or physical content of a sexual nature is made either
explicitly or implicitly a term or condition of an individual's employment.
Submission or rejection of such conduct by an individual is used
A) as a basis for employment decisions affecting that individual.
Such conduct has the effect of unreasonably interfering with an
B) individual's work performance.
Such conduct creates an intimidating, hostile, or offensive work
C) environment for an individual

D) All of the above.

E) None of the above.

10
INCORRECT Identify the reason for not believing that it would be correct to shift from
the reasonable "man" or reasonable "person" standard to the reasonable
"women" standard for identifying conduct that unreasonably interferes
with work:
The shift from reasonable man to reasonable "person" should
A) alert us to the possibility that "person" is simply a disguised
version of "man."
This shift can reinforce the unacceptable sexual and
B) paternalistic stereotype of women as more sensitive, fragile,
and delicate than men and that, therefore, women need extra
protection from the rough and tough workplace.
Unless, as one judge has ruled, the outlook of the reasonable
C) women is adopted, defendants and courts are permitted to
sustain ingrained notions of reasonable behavior as fashioned
by male offenders.
The reasonable "person" standard can have the effect of simply
D) maintaining the status quo in a workplace that remains very
male oriented.

International Business and Globalization

Select the
statement this
is not an
objection to
insisting that
diversity of
values in
cultures entails
ethical
relativism:
It is a mistake to conclude too quickly that because cultures are
A) diverse, they necessarily hold diverse ethical values.
Given different circumstances, conduct that might be
B) condemned or excused in one context might be excused or
condemned in another. But, excusing unethical behavior is not
the same as justifying it.
Even in cases where a local culture holds values different from
C) one's own, a person's own integrity would require that one's
personal values not be abandoned.
Attempts to justify or excuse otherwise unethical conduct by
D) appeals to local values and customs that are advanced only to
contribute to the bottom line are simply another instance where
ethical responsibilities restrict self-interest. This fact alone is
not a good reason to abandon ethics in the face of a
disagreement of values.

E) All of the above.

F) None of the above.

2
INCORRECT Which of the following rights might clearly be the sole responsibility of
government rather than of international business?

A) The right to minimal education.

B) The right to nondiscriminatory treatment.

C) The right to physical security.

D) The right to a fair trial.

E) A and D.

F) B and C.

3
INCORRECT Identify the ways in which the process of international economic
integration has increasingly become more common and accelerated in
the last decade or two:
International trade agreements such as the General Agreement
A) on Tariffs (GATT) and the North American Free Trade Agreement
(NAFTA) have been established.
The Euro was adopted beginning 2002 within the European
B) Union, establishing a common currency.
International loans from the World Bank have supported major
C) development projects throughout the world.
Monetary policies established by the IMF have made it
D) increasingly easy for capital to flow between countries.

E) All of the above.

F) None of the above.

4
INCORRECT Select the reasoning that challenges support for the ethical case for free
trade and international economic cooperation:
The pursuit of profit within social and economic arrangements
A) which secure free and open competition will allocate resources
to their most highly valued uses and distribute those resources
in ways that will produce the greatest good for the greatest
number of people.
International competition for labor, jobs, goods and services,
B) natural resources, and capital will, over time, increase the
overall well-being of everyone.
Economic integration is a major impediment to conflict: the
C) more countries cooperate economically, the less likely they will
want to go to war.
Even though newly employed workers in the poorer countries
D) who are forced to take jobs that are at a subsistence level in
sweatshop conditions are better off in these jobs than they
would be without them, the choice to work under such
conditions is little more than extortion and exploitation by
business.

5
INCORRECT Choose the statement that does not provide a reasonable way for
 international businesses to treat their employees in foreign countries on
a comparable level with their treatment of employees in their home
countries:
Pay wages and benefits that are somewhere between those paid
A) in the home country and the minimal wages that will get people
to work in the host country.
Pay wages and benefits that are very similar in the home and
B) host countries.
If it takes two people earning minimum wages to support a
C) family of four just above the poverty level in the United States,
a minimum wage in the host country would be similarly
determined.

D) All of the above.

E) None of the above.

6
INCORRECT Choose the statements that do not support the idea that international
businesses should rely on local firms and independent contractors to
supply workers in host countries:
To benefit from less-costly local labor, business should hire
A) workers directly and take full and direct responsibility for how
they are treated.
Hiring individuals as contractors on a per-item basis avoids
B) having to pay fair wages and benefits.
As independent contractors, these individuals are responsible
C) for the terms and conditions of their own employment.
Local firms are better equipped to recruit competent workers
D) who will be satisfied with minimum wages.

E) A and D.

F) A and B.

7
INCORRECT Here are some ethical reasons for regulating economic activity.
Determine which ones are not likely to be judged a barrier to free trade:

A) Protecting the environment.

B) Protecting workers and consumers.

C) Protecting family farms.

D) Protecting domestic industries.

E) All of the above.

F) None of the above.

8 CORRECT
Which statement is not a policy included in Thomas Friedman's "Golden
Straitjacket," the policies that a country should follow for itself if it "opts
for prosperity"?

A) Getting rid of quotas and domestic monopolies.

 B) Privatizing state-owned industries and utilities.
Opening industries, stock, and bond markets to direct foreign
C) ownership and investment.

D) Restricting imports.

E) All of the above.

F) None of the above.

9 CORRECT
Identify the statement that challenges the criticism that global economic
integration threatens deeply held noneconomic values:
The WTO, World Bank, and IMF are themselves undemocratic
A) bureaucracies that threaten the political values and self-
determination in poor countries.
Private multinational corporations are replacing legitimate
B) governments as the true international decision makers.
The policies of the "Golden Straitjacket" are simply rational
C) requirements for a nation that chooses prosperity over poverty.
Financial and economic norms are analogous to scientific laws
discovered by social scientists.
Global market capitalism fueled by multinational corporations
D) seeks to expand worldwide markets for their products and
creates a cultural homogenization which threatens local cultures
and traditions.

Corporate Social Responsibility

The most
influential
theory of
corporate
responsibility
of the past
century is:

A) The moral minimum model.

B) The classical model.

C) The social contract theory.

D) The stakeholder theory.

2
INCORRECT The ethical roots of the classical model of corporate social responsibility
are found in which statement:
The idea that the interests of stakeholders are as important as
A) the interests of a corporation's stockholders.
 The free market theory which holds that managers are ethically
B) obliged to make as much money as possible for their
stockholders because to do otherwise would undermine the
very foundations of our free society.

C) The ethical imperative to cause no harm.

D) The ethical imperative to prevent harm.

3
INCORRECT Which of the following reasons might a free market economic theorist
use to justify the hostile takeover of a company?
The takeover target company's stock is undervalued. That is
A) evidence that the resources are being inefficiently used.
If current management is not maximizing profits, it is violating
B) the utilitarian imperative to maximize the overall good.
The organization seeking to take over the target company will
C) maximize profits for the stockholders and will be serving the
public's interests because it is only by satisfying consumer
(public) demand that a business can make profits.
If the takeover target's managers are using their stockholders'
D) money to serve interests other than those of the stockholders,
they are stealing from them.

E) All of the above.

F) None of the above.

4
INCORRECT Which of the following statements does not represent a market failure,
i.e., a situation in which the pursuit of profit will not result in a net
increase in consumer satisfaction?
The costs of pollution, groundwater contamination and
A) depletion, soil erosion and nuclear waste disposal are borne by
parties external to the economic exchange between buyer and
seller.
Where there is no mechanism for pricing, for setting a value on,
B) public goods, there is no guarantee that the markets result in
the optimal satisfaction of the public interest in regards to
public goods.
Situations in which externalities have been internalized result in
C) an equilibrium in the exchange price between true costs and
benefits.
The pursuit of individual self-interest results in a worse outcome
D) than would have occurred had the behavior of the parties
involved in the economic exchange been coordinated through
cooperation or regulation rather than mere competition.

5
INCORRECT Which statement does not support the claim that an unconditioned
ethical directive such as the one the classical model of corporate social
responsibility demands of business management is inappropriate for
utilitarian theory?
Markets can work to prevent harm only by first-hand
A) experience with harms that have to occur before they can be
remedied.
 It is claimed that once market failures are adequately
B) addressed by the government, business just needs to obey the
law that addressed them. Business, however, has the ability to
inappropriately influence government policy and the law.
Business has the ability to influence consumers' desires by
C) helping shape those desires through advertising.
A more precise formulation of a utilitarian-based principle would
D) be to maximize profit whenever doing so produces the greatest
good for the greatest number, with the proviso that managers
must consider the impact a decision will have in many ways
other than merely financial.

6
INCORRECT According to the private property defense of the classical model of
corporate social responsibility, managers who use corporate funds for
projects that are not directly devoted to maximizing profits are stealing
from their owners. Which statement supports this view?
Property rights are restricted when they conflict with the basic
A) rules of society as embodied in law and custom.
The connection between ownership and control that exist for
B) personal property does not legally exist for corporate property.
Investors buy their stocks with the hope of maximizing return
C) on their investment.
Stockholders in publicly traded corporations are better
D) understood as investors rather than owners.

7
INCORRECT Which statement is true of Bowie's Kantian approach to business ethics?
People have a duty both to not cause harm and to prevent
A) harm.
Both causing no harm and preventing harm override other
B) ethical considerations.
While it is ethically good for managers to prevent harm or do
C) some good, their duty to stockholders overrides these concerns.
A narrow interpretation of Bowie's "cause no harm" imperative
D) makes the duties faced by management under the neo-classical
model significantly different from the classical model.

8
INCORRECT Which statement represents a challenge to Evan's and Freedman's
defense of the stockholder theory against the classical model of
corporate social responsibility?
The law now recognizes a wide range of managerial obligations
A) to such stakeholders as consumers, employees, competitors,
the environment, the disabled.
Courts and legislatures have recognized that the rights and
B) interests of various constituencies affected by corporate
decisions limit managers' fiduciary responsibility.
Stakeholder theory cannot answer the question as to how,
C) exactly, a manager should go about balancing the diverse and
competing claims of all parties.
There is no guarantee that when managers produce profits they
D) will serve the interests of either stockholders or the public.