Aggregate benefits and per capita benefits are indicators of the demand for nonmarket
action.
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Friedman’s objection is to corporate social responsibility that is anticipated.
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In 1999 Macao was returned to China by Portugal.
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Gert’s test for when an injustice is warranted to avoid a greater injustice requires that a
rational observer would understand the reason for the action.
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Testimony is based on the connection between constituents and their elected
representatives.
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Microfinance is independent of nonmarket risks.
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State aids are subsidies paid by the European Union to their member states.
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Rents from demand-side subsidization were earned by power producers and the
producers of power generation inputs, such as solar panels.
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Banco Compartamos is am example of microfinance institution.
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Teleological and deontological systems are similar in their nature and structure, and
they always yield the same evaluations of actions.
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Claims that people have economic rights to housing or food are claims about
instrumental rights intended to improve their well-being.
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The Chinese government views renewable energy as an attractive industry for growth.
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A pharmaceutical company does not mention all the side-effects of its new medical
formulation. This is an example of moral hazard problem.
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Some rights are instrumental when viewed from the perspective of autonomy and
liberty and intrinsic when viewed in terms of the consequences they yield.
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Liability costs affect the prices of products and safety decisions.
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Information is the basic unit of analysis and the focus of nonmarket action.
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Directives issued by the European Union are legally binding with respect to the result
sought, but national governments are responsible for how the result is achieved.
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The EU’s Common Agricultural Policy provides a vision for the free circulation of labor
and the rights to fair wages, improvement of living and working conditions; social
security and equal treatment for men and women.
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The Kyoto Protocol targets expire in 2014.
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If the aggregate benefits for an interest are widely distributed rather than concentrated,
the per capita benefits can be small, providing little incentive for nonmarket action.
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Business ethics pertains to situations in which individuals are in an organizational
position and act as agents of the company and its owners.
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A granted right is established by moral consensus or by government and is accompanied
by a clear assignment of the corresponding duty.
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The food market in India was complex because of ethnic differences and religious
traditions across the country.
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Proof that a firm’s competitors offered customary payments to a client provides moral
justification for the practice.
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The identification stage of a crisis involves actions by the company or government to
deal with the crisis.
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Rule utilitarianism requires that a person contribute even if others do not contribute.
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The actions of pluralistic interests concerned with a nonmarket issue compete in the
arenas of private institutions.
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The effectiveness of private politics social pressure is independent of the extent to
which companies accept social responsibilities.
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The Schengen Agreement established, subject to certain exceptions, free trade among
Canada, Mexico, and the United States.
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Interactions between nations and foreign firms are governed by the laws of the host
nation and by international law.
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The first step that a nonmarket issue passes through is issue identification.
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Before the enactment of the SEA, Council decisions were governed by a unanimity
rule.
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At the level of an individual firm, successful participation in a domestic market requires
specific knowledge of that market so as to apply the firm’s expertise.
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A defendant has two defenses under the rule of reasonthe first is that defendant did not
commit the crime and the second is that, although the defendant committed the act, it
was not unreasonable to do so.
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An implication of the experimental evidence regarding audience effects is that firms
that have the public and consumers as an audience may undertake activities that firms
out of the view of the public and consumers may not undertake.
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Companies operating in developing countries are susceptible to private politics because
groups in developed countries closely monitor operations in these countries.
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A business strategy serves as a firm’s navigational guide in its market and nonmarket
environments.
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In addition to a cost difference defense, a firm can defend itself by arguing that the price
discrimination was necessary to meet competition.
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Behavioral ethics experiments conclude that moral suasion can decrease ethical
behavior.
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________ are the two principal components of crisis response.
a) Auditing and analysis
b) Communication and rectification
c) Agreement and settlement
d) Risk assessment and negotiation
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Strategies involving the provision of political information are ________.
a) not used for regulatory and administrative agencies
b) independent of the political responsiveness of institutions
c) are associated with less politically responsive institutions
d) often used in conjunction with representation strategies
Answer:
The new IO perspective on collusion and price fixing is that ________.
a) antitrust supervision is necessary
b) firms will collude when possible
c) it easier to sustain
d) it difficult to sustain
Answer:
The first stage in the life cycle of a crisis is ________.
a) reconciliation
b) escalation
c) identification
d) intervention
Answer:
In most jurisdictions, products liability cases are covered by a ________, which is often
4 years.
a) statute of limitations
b) statute of autonomy
c) statute of compensation
d) statute of frauds
Answer:
From the perspective of producers, damage awards ________.
a) facilitates the estimation of the ex post consequences of the producers’ ex ante
decisions
b) are difficult to predict
c) act as prime deterrents to insurance companies that disallow producers to insure
against that risk
d) are highly predictable
Answer:
How can the relative inefficiency of domestic industries be addressed?
a) those injured may be compensated under the Reciprocal Trade Agreement Act
b) those injured may be compensated under the Trade Adjustment Assistance Act
c) relief can be granted in the form of permanent tariffs and the renewal of previously
granted trade concessions
d) protection is provided by stimulating imports
Answer:
________ focus(es) on institutions to govern the interactions among individuals.
a) Moral philosophy
b) Political philosophy
c) Cultural taboos
d) Ethics
Answer:
Which of the following increased costs and limited market competition?
a) government restrictions on businesses
b) stringent antitrust reviews
c) family-controlled companies
d) the ban on exportation
Answer:
According to Deng, which of the following was one of the “Four Modernizations”?
a) defense
b) social norms
c) cultural heritage
d) religion
Answer:
Which of the following will provide little incentive for the demand of nonmarket
action, in terms of interests?
a) high aggregate benefits
b) widely distributed aggregate benefits
c) concentrated aggregate benefits
d) high per capita benefits
Answer:
In ________ politics, benefits from the alternative are widely distributed, whereas the
harm from the alternative is concentrated.
a) majoritarian
b) interest group
c) client
d) entrepreneurial
Answer:
Utilitarianism aggregates individuals’ well-being as evaluated in terms of their
________, and every person’s utility is given equal weight.
a) actions
b) preferences
c) choices
d) capabilities
Answer:
The law pertaining to product safety developed from ________, which focus on
economic well-being.
a) the laws of contracts and warranties
b) the laws of property and entitlements
c) the statute of limitations
d) eminent domain
Answer:
India began offering $30 to a woman who had her baby in a hospital rather than at
home to ________.
a) increase the income of single mothers
b) encourage the growth of hospitals
c) reduce village dependence on midwives
d) improve maternal and infant care
Answer:
________ includes firms from a number of industries and thus represent a range of
interests.
a) Political coalition
b) Peak associations
c) Trade associations
d) Ad hoc coalition
Answer:
Which of the following nonmarket implementation activities typically takes place
behind the scenes?
a) public advocacy
b) lobbying
c) testimony
d) peak association
Answer:
The Foreign Corrupt Practices Act (FCPA) does not make bribery of foreign officials a
criminal offense.
Answer:
Which of the following is true with regard to the Dodd-Frank Act?
a) The Act made suing an agency for fraud easier by allowing investors to bring
lawsuits against credit rating agencies that knowingly or recklessly failed to conduct a
reasonable investigation of the rated security.
b) The Act dissolved the Office of Credit Ratings and relaxed internal controls by the
credit rating agencies.
c) The Act restructured the ratings system.
d) The Act forced banks to separate their commercial banking and investment banking
businesses.
Answer:
When consequences are a function of the actions of more than one individual,
________ considers the actions of all individuals simultaneously.
a) rule utilitarianism
b) act utilitarianism
c) fundamentalism
d) hedonism
Answer:
According to Wartick and Rude, who, among the following, must be involved for
successful issues management?
a) competitors
b) government
c) suppliers
d) top management
Answer:
In terms of an activists’ generic strategy, what is a low-cost method of getting
information out to the public that they want to be distributed?
a) use the news media
b) use television spots
c) use nationwide lobbying of legislatures
d) file a lawsuit
Answer:
According to the dissenters, who criticized the majority report issued by the Financial
Crisis Inquiry Commission (FCIC), ________ was one of the essential causes of the
crisis.
a) traditional mortgages
b) widespread failures in financial regulation
c) breakdown in ethics
d) the fall in housing prices
Answer:
The Index of Economic Freedom is annually published by ________.
a) Freedom House
b) the World Bank
c) the Heritage Foundation and the Wall Street Journal
d) Transparency International
Answer:
What space had Microsoft largely ignored, relying instead on its aggressive approach to
markets?
a) legal
b) public sentiment
c) political
d) commercial
Answer:
The fair trade movement was begun to improve the lives of poor farmers and workers
trapped by ________ conditions.
a) political
b) social
c) nonmarket
d) market
Answer:
In client politics, the ________.
a) alternative is favored over the status quo
b) status quo is favored over the alternative
c) benefits are widely distributed
d) harm is concentrated
Answer:
Cooperative private politics ________.
a) increases the vulnerability of a brand
b) attracts more confrontational activists to the firms’ policies
c) increases social pressure on a firm
d) improves the public standing of a firm
Answer:
Which of the following is a low-profile nonmarket implementation strategy?
a) lobbying
b) grassroots campaign
c) judicial action
d) public advocacy
Answer:
Which of the following statements is true of a crisis?
a) It does not affect the credibility of the company’s management.
b) It always results in property damage.
c) It may be revealed directly to the public or identified within the company.
d) It always results from a series of development over time.
Answer: