In one’s lobbying efforts, it is a good principle to make straightforward presentations to
members of trade associations.
Answer:
In formulating a strategy for addressing a crisis, as long as a firm has strong brand
reputation it need not consider its exposure to liability or response to stakeholders and
the public.
Answer:
An important component of a private politics campaign is the selection of a target.
Answer:
Kyoto mechanisms referred to credits bought by countries to help finance projects in
developing countries that would reduce greenhouse gases.
Answer:
Direct pressure and boycotts are examples of private nonmarket actions.
Answer:
The standard of strict liability is considered by some to assign too much of the cost of
injuries to firms and too little to consumers, distorting the incentives for care.
Answer:
The media covers all issues under the same criteria of controls and editorial standards.
Answer:
Private sector is does not supply public goods.
Answer:
Gains from trade are evident when one country can produce a good more efficiently
than another country, and the latter country can produce a different good more
efficiently than can the former country.
Answer:
Utilitarianism focuses on the numbers of people who are better or worse off because of
an action.
Answer:
Lobbying is the principal nonmarket strategy for influencing the EU institutions.
Answer:
A company’s susceptibility to private politics is independent of its lines of business.
Answer:
Monopolization is also addressed under the antitrust laws.
Answer:
Organizational learning is important to crises management program.
Answer:
Organizational policies and learning is an important part of root cause analysis.
Answer:
The Coase theorem does not apply to a tradable permits system.
Answer:
TRIPS, or Trade Related Aspects of Intellectual Property Rights, provides a narrow
protection to intellectual property and is, thus, excluded from the WTO dispute
settlement system.
Answer:
The pre-Ming Chinese were strictly against foreign commerce.
Answer:
Reciprocity has implications for dealing with direct stakeholders and for the
implementation and maintenance of relational contracts.
Answer:
In situation where national laws have been harmonized with EU law, EU law takes
precedence when a conflict arises.
Answer:
The progress of an issue is shaped by the actions of firms and other interests and by the
characteristics of the institutions in whose arenas the issue is addressed.
Answer:
A feasible alternative to public order provided by the law is private order based on
private assurances among trading partners.
Answer:
When misuse can be anticipated, marketing a product to those who are likely to misuse
it may constitute deception.
Answer:
For lobbying in agencies that do not have direct constituents, political information is
relatively more important than technical information.
Answer:
A natural monopoly results when costs are increasing in the scale of output or in the
scope of the set of goods a firm produces.
Answer:
One of the approaches to effectively manage nonmarket issues is to respond to
nonmarket issues only when they are strong enough to force the firm to act.
Answer:
The Securities Exchange Act did not regulate insider trading.
Answer:
Activists and interest groups use threat of legislation and regulation strategies.
Answer:
Portable ultrasound machines have made the illegal process of sex selection possible.
Answer:
The focus of ethics is primarily on issues involving direct mutual advantage.
Answer:
The Credit CARD (Card Accountability Responsibility and Disclosure) Act of 2009
was passed to ________.
a) increase the regulation of credit card issuers
b) increase the dropping interest rates on credit card borrowings
c) reduce the notice period for late fees
d) enhance the ability of card issuers to use risk-based pricing
Answer:
Which of the following is true with regard to the report issued by the Financial Crisis
Inquiry Commission (FCIC) in 2011 on the causes of the financial crisis?
a) The majority laid much of the blame on the role of Fannie Mae and Freddie Mac.
b) The majority held the Community Reinvestment Act (CRA) primarily responsible for
the crisis.
c) The majority concluded that Wall Street and its securitization of high-risk mortgages
did not contribute significantly to the crisis.
d) The majority concluded that stronger regulation and more vigilant enforcement could
have prevented the crisis.
Answer:
Reciprocity is powerful when ________.
a) the responder can neither accept nor reject the allocation by the proposer
b) incentives are allocated regardless of the actual effort expended to do a work
c) both parties to a transaction reciprocate
d) only one party to the transaction has the opportunity to reciprocate
Answer:
Which of the following statements is true of campaign financing?
a) huge amounts of campaign spending is involved in federal elections
b) contributions buy favors from officeholders
c) corporations provide bulk of the funding for campaigns
d) contributions make firms gain access to members of Congress for lobbying
Answer:
Low-profile nonmarket strategies are most suitable for ________.
a) interest group
b) majoritarian politics
c) client politics
d) entrepreneurial politics
Answer:
The core principles of an organization can be viewed as ________.
a) flexible
b) arbitrary
c) moral
d) unchanging
Answer:
The responsibility for formulating nonmarket strategies ultimately rests with ________.
a) taxpayers
b) management
c) public institutions
d) interest groups
Answer:
Special interest groups ________.
a) pursue issues because of the benefits that accrue to their members
b) monitor the activities of firms and call those activities to the attention of the media,
government, and public
c) represent the interests of individuals, such as those affected by pollution
d) take direct action against firms to force them to change their policies or can appeal to
the public for support
Answer:
A rent chain ________.
a) does not help generate nonmarket action through constituency connection.
b) gives a firm the right or the opportunity to participate in public processes.
c) can be mobilized only on issues in the government institutions.
d) does not include stakeholders irrespective of whether they benefit from their
interactions with the firm.
Answer:
Most products liability cases are filed in ________.
a) district courts
b) state courts
c) magistrates’ court
d) the Supreme Court
Answer:
The ________ pertains to unreasonable restraints of trade with a focus on joint conduct.
a) Federal Trade Commission Act
b) Robinson-Patman Act
c) Sherman Act
d) Clayton Act
Answer:
________ is an example of an opportunity to use an emerging market country to export
goods to better developed countries and markets?
a) The extractive industries
b) Wholesale and retail sales
c) Domestic transportation and telecommunication
d) Domestic consumption economy
Answer:
Which of the following is a national law?
a) the Kyoto Protocol
b) the Foreign Corrupt Practices Act
c) the North American Free Trade Agreement
d) the Geneva Convention
Answer:
Which of the following explains the preference for boys over girls in India?
a) the loosening bonds of tradition
b) the practice of dowry
c) the rise in economic wealth
d) the low ratio of men against women
Answer:
________ predicts that regulation initially will be found where there are market
imperfections and over time will evolve to serve the interests of the regulated industry.
a) Adverse selection
b) Asymmetric information
c) Capture theory
d) Rent-seeking theory
Answer:
Which of the following is not applicable to a consent decree?
a) involves judicial determination
b) binds only consenting parties
c) may remain in effect indefinitely
d) does not set a precedent for other cases
Answer:
The underlying principle of the rent chain is that ________.
a) the greater the rents affected by a nonmarket issue, the lower are the incentives to
take nonmarket action to obtain or protect those rents
b) the lower the rents affected by a nonmarket issue, the greater are the incentives to
take nonmarket action to obtain or protect those rents
c) the rents affected by a nonmarket issue are independent of the incentives to take
nonmarket action to obtain those rents
d) the greater the rents affected by a nonmarket issue, the greater are the incentives to
take nonmarket action to obtain or protect those rents
Answer:
Mark works in an automobile manufacturing firm based in Tennessee. He noticed that a
group of executives in the firm regularly accepted bribes from an automotive brake
manufacturer who sells substandard brakes for lower prices. Mark understands that this
is unethical behavior but does not have the courage to take the right action. Which of
the following actions should the firm take in this instance to encourage Mark to take the
right action?
a) The firm should start manufacturing high quality brakes at lower prices.
b) The firm should revise its compliance system to encourage self-disclosure.
c) The firm should leave the responsibility of ethical behavior on the personal integrity
of its employees.
d) The firm should reveal information about its operations to the shareholders.
Answer:
The Clayton Act ________.
a) pertains to unreasonable restraints of trade with a focus on joint conduct
b) prohibits unfair methods of competition and unfair or deceptive acts
c) focuses on unilateral conduct and proscribes attempts to monopolize
d) addresses potentially anticompetitive actions
Answer:
Which of the following statements is true of nonmarket activities of businesses from the
perspective of the public?
a) Businesses misrepresent information that play on ignorance and biases.
b) Businesses do not have too much power to make a change in the society.
c) Businesses do not exploit institutional features.
d) Business goals are always congruent with public interests.
Answer:
Which of the following companies is least susceptible to private politics?
a) ReleeF, a pharmaceutical company that manufactures generic drugs
b) Bluetip, a petroleum exploration and production company
c) MoreSay, a multinational clothing company based in California with the
manufacturing done in Vietnamese sweatshops
d) WeGroom Group, that designs and builds houses in developing countries because of
the advantages of low-cost labor
Answer:
________ pertains to what the interests and institutional officeholders know or believe
about the issues and the forces affecting their development.
a) Independence
b) Individualism
c) Ideas
d) Information
Answer:
The Consumer Financial Protection Bureau (CFPB) has authority over ________.
a) auto dealers
b) hot dog vendors
c) banks with assets under $8 billion
d) banks with assets over $10 billion
Answer:
Most of the costs of environmental protection are borne by __________.
a) the government
b) private parties
c) the EPA
d) solid waste disposal board
Answer:
Which of the following portrays a tying arrangement subject to antitrust scrutiny?
a) A manufacturer of flight navigation system requires retailers to sell at a price it
specifies.
b) A manufacturer of flight communication systems requires dealers to carry only its
parts.
c) Navigation system manufacturers of U.S refuse to sell such critical parts to a leading
aircraft manufacturer.
d) A manufacturer of flight communication system grants exclusive rights to a
distributing firm.
Answer:
Which of the following issues is most often the subject of public politics?
a) environmental laws
b) human rights
c) health and safety
d) copyright laws
Answer:
________ have become an effective means of achieving environmental goals at the
least cost to society.
a) Command-and-control regulations
b) Incentive-based systems
c) Life-expectancy approaches
d) Supply-chain approaches
Answer:
The Herfindahl-Hirschman Index (HHI) is used by the Department of Justice and
Federal Trade Commission to measure the ________.
a) fine amount in antitrust lawsuits
b) amount of hard money available to a firm
c) market shares of a firm
d) concentration in an industry
Answer:
In nonmarket analysis and strategy formulation, interests are characterized as
________.
a) moral and distributive
b) supply and demand
c) monistic
d) aligned
Answer:
________ are the principal means of forging a majority from a collection of minorities.
a) Coalitions
b) Campaign contributions
c) Representation and information strategies
d) Grassroots campaigns
Answer:
________ is the antithesis of self-interest.
a) Paganism
b) Functionalism
c) Hedonism
d) Utilitarianism
Answer: