Opportunities can be controlled by government at one extreme and markets at the other
extreme.
Answer:
The greater the cost of organizing, the less prevalent the free-rider problem.
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The Industrial Organization school of thought believes that government intervention in
markets is intended to improve economic performance.
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The theory of comparative advantage is based on the assumption of perfectly
competitive markets.
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Moral motivations are analyzed in the screening phase of analysis.
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The societal significance perspective stresses on covering all stories with equal
emphasis.
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The Securities Act required full disclosure when new securities were issued.
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The size and growth of the Indian pharmaceutical market and the new patent protection
provided under TRIPS attracted foreign pharmaceutical companies.
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The Federal Reserve has rule-making authority over the practices of credit card
companies.
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If the culture in the organization encourages or condones questionable behavior or if
incentive systems place self-interest before all else, ethical behavior will primarily rest
on the personal integrity of employees.
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Teleological or consequentialist systems hold that moral right takes precedence over the
good and can be evaluated by considerations independent of, or in addition to,
consequences.
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An emissions tax is considered superior to a tradable permits system because it is
impossible to know the amount of abatement in advance with a permits system.
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A copyright must be filed with the government to be considered valid.
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Subsidization of renewable power deters producers from realizing economies of scale.
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Individuals and managers cannot be subject to fines under the Antitrust Procedures and
Penalties Act.
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The effectiveness of nonmarket action is independent of the cost of organizing
individuals and organizations with aligned interests.
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A lens manufacturing firm convinces other manufactures in the industry to halt supplies
to a distributor. Considering all things constant, the lens manufacturing firms are not
liable to an antitrust suit.
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Some businesses have emerged and prospered because of the inefficiency of the Indian
economy.
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Following the fall of Lehman Brothers in September 2008, the repo market froze
leading to a severe recession.
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The general framework of Confucian thoughts displays considerable rigidity.
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Command-and-control regulation does not impose uniform controls and standards on
dissimilar sources of pollution.
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From the perspective of rule utilitarianism, if a purely self-interested company offers a
bribe to a customer, a matching bribe by its competitor is morally justified.
Answer:
At the conclusion of World War II, a group of countries led by the United States
established the International Trade Organization (ITO)..
Answer:
Confucianism has often been linked with the development and operation of capitalism
in China and other Asian countries.
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The European Union was established because Europeans recognized the need to fortify
country borders and strengthen military bases after World War II.
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In a private politics campaign, negotiation with activists is involuntary.
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Lobbying takes place only on the federal level and not at state and local levels.
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Depending extensively on government subsidies for solar power is not free from risks.
Answer:
The framework for analysis of nonmarket issues includes the screening of generated
alternatives, the analysis of those alternatives, and the choice of a strategy.
Answer:
Natural monopolies provide an efficiency rationale for regulation to align private and
social costs.
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The nonmarket strategies available to firms are the same as those available to other
interest groups but its appropriateness and effectiveness can differ.
Answer:
The Calabresi and Melamed principles provide a framework for reasoning about the
assignment of duty.
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Emerging markets countries have imposed a variety of restrictions on foreign direct
investment, foreign exchange transactions, and the repatriation of earnings.
Answer:
The Coase theorem indicates that the distributive consequences of a legal standard can
be independent of their efficiency consequences.
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Social performance is not only self-assessed by firms but is also assessed through
external monitoring and evaluation by activist and other groups.
Answer:
In the Wilson-Lowi Matrix, when the consequences from an alternative are widely
distributed, the incentives to take nonmarket action are weak.
Answer:
The European Union requires works councils or a consultative process between
management and workers, or ‘social partners” in the terminology of European Union.
Answer:
If a firm addresses the nonmarket issue in the legislative stage, the firm has more
flexibility and its range of alternatives is wider.
Answer:
Asymmetric information results in market efficiency when it is in the self-interest of its
possessor not to supply it.
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The results for the corporate social performance (CSP) equation provide no support for
the perquisites hypothesis and strong support for the responsive CSP hypothesis. That
is, better CFP results in lower CSP.
Answer:
According to Donaldson, which of the following rights is subject to cultural
interpretation?
a) ownership of property
b) speech and association
c) fair trial
d) physical security
Answer:
Which of the following is a function of root cause analysis?
a) it identifies the causes of a crisis
b) it identifies the geometric and geographic properties of an organization
c) it assesses risks and their causes
d) it assesses the potential impacts of a crisis on a firm’s reputation
Answer:
Kant argued that the intrinsic rights established in accord with the categorical
imperative ________.
a) are immoral
b) do not conform to ethical standards
c) do not conflict
d) are dissonant
Answer:
GLOBEagents is formed by individual travel agents, travel organizations, food services
and other sub sectors of the travel industry in Colorado State to work for state
legislation on travel taxes. GLOBEagents is a ________.
a) political coalition
b) peak associations
c) ad hoc coalition
d) trade associations
Answer:
Which of the following attracted foreign pharmaceutical companies to India?
a) the adoption of new patent protection laws
b) the restrictions against acquisitions
c) the takeover of family-controlled companies
d) the absence of domestic entrepreneurship
Answer:
Moral philosophy is concerned with ________.
a) deducing the standard of maximizing one’s self-interest
b) the pursuit of pleasure as the highest good
c) deducing standards from axioms or self-evident principles
d) making exceptions in particular situations, resulting in the violation of underlying
principles
Answer:
Which of the following is an example of technical information provided for lobbying?
a) A firm publishes a report on the increase in state employment rate after its various
branches were opened.
b) A firm provides data for the loss of annual manufacturing revenue if the legislation
on carbon tax is passed.
c) A firm provides information for state revenue loss on sales tax for internet purchases.
d) A firm publishes a report on the increase in local education rate if the legislation on
business research tax was passed.
Answer:
______ occurs when one group of customers pays more and another group pays less
than the cost of providing their service.
a) Deadweight loss
b) Free-riding
c) Moral hazard
d) Cross-subsidization
Answer:
The Basel Committee on Banking Supervision is an organization of 27 nations that
________.
a) created the Troubled Asset Relief Program in 2008
b) issued a 633-page report in 2011 blaming the dramatic failures of corporate
governance and risk management for the financial crisis
c) sets capital requirements for banks
d) sets ethical standards for shadow banks
Answer:
Why were the loan guarantee and cash option awarded to wind power producers
jeopardized?
a) State public utility regulatory agencies were barred by law from determining wind
energy prices.
b) The huge federal budget deficit required measures to reduce expenditure.
c) State public utility regulatory agencies gave a negligible premium for wind power.
d) The price of natural gas fell considerably.
Answer:
Between 1983 and 1985, in the agricultural sector, the government replaced mandatory
grain purchases with a contracting system known as the ________.
a) One Country, Two Systems
b) Household Responsibility System
c) Danwei system
d) Guanxi system
Answer:
Which of the following is true of the audience effect in behavioral ethics experiments?
a) the larger the audience, the greater the audience effect
b) the greater the degree of negligence of actions, the greater the audience effect
c) the greater the anonymity of the decision maker, the stronger the scrutiny
d) the smaller the audience, the greater the importance of the audience members
Answer:
The ________ prohibits price discrimination not justified by cost differences in serving
customers.
a) Federal Trade Commission Act
b) Clayton Act
c) Robinson-Patman Act
d) Sherman Act
Answer:
Which of the following is true of the Coase theorem?
a) It pertains to distributive objectives and social justice.
b) It addresses the private attainment of social efficiency and the conditions for its
attainment.
c) It implies that when bargaining between the parties to an externality is possible,
social efficiency cannot be achieved.
d) It underrates the role of government in assigning entitlements to private parties.
Answer:
Which of the following institutions does not implement regulation?
a) judicial institutions
b) National Labor Relations Board
c) independent commission
d) agencies of the executive branch
Answer:
In relation to the WTO Dispute Settlement Body (DSB), ________ has been involved in
more disputes than any other country.
a) the United States
b) Venezuela
c) Brazil
d) North Korea
Answer:
Which of the following is a part of BRIC countries?
a) Belgium
b) India
c) Canada
d) Rwanda
Answer:
Which of the following is true of the difference between the Business Roundtable’s
view and Friedman’s theory with regard to the conceptions of social responsibility?
a) In contrast to the Roundtable’s basic view that does not admit constituencies,
Friedman’s theory identifies seven constituencies: customers, employees, financiers,
suppliers, communities, society at large, and shareholders.
b) The Roundtable views shareholders as principals, whereas Friedman views them as
providers of capital risk.
c) In contrast to the Roundtable’s perspective, the principals in Friedman’s theory are
managers.
d) The objective of a corporation is not as clearly identified in the Roundtable statement
as it is in Friedman’s theory.
Answer:
Which of the following is true with regard to Rawl’s theory of justice?
a) Rawls argues for the priority of the right over the good.
b) Rawl is more concerned with developing maxims for judging the reasons or motives
that individuals have for their actions than with developing principles to guide the
design of society’s institutions.
c) Rawls provides a theory of retributive justice set in the tradition of Descartes.
d) Rawls maintains that just principles are those that would be “chosen without
ignorance” from a position in which one knows one’s personal characteristics or the
place one will subsequently have in society.
Answer:
Which of the following statements describes the relationship between confrontational
and cooperative private politics?
a) cooperative private politics does not affect confrontational private politics
b) cooperative private politics is independent of the threat of confrontational private
politics
c) confrontational private politics creates a demand for cooperative private politics
d) confrontational private politics does not provide the adequate threat because of
which cooperative private politics is preferred by companies
Answer:
The Single European Act represented a major step toward ________ within the Union.
a) political segregation
b) cultural assimilation
c) ethnic compartmentalization
d) economic integration
Answer:
Which of the following characterizes the competition in a nonmarket environment?
a) Firms compete through their market or competitive strategies.
b) The competitive strategies are intermediated by markets.
c) Public pressure leads to competition involving individuals, activists, interest groups,
and firms.
d) The nonmarket environment neither changes nor the issues on a firm’s nonmarket
agenda evolve.
Answer:
The Kyoto Protocol is associated with ________.
a) reducing unemployment globally
b) privatization of the renewable energy industry
c) global climate change
d) the prevention of oil spillage in oceans
Answer:
Which of the following is applicable to the implementation of nonmarket strategies?
a) hiring a firm to assess industry cost structure
b) assigning employees to analyze the financial statements of the firm
c) hiring candidates to handle a new project
d) designating a manager to engage in lobbying
Answer:
________ produced a large and growing middle class in India.
a) Rapid economic growth
b) Nationalization
c) Central planning
d) Ethnic synchronization
Answer:
Before the Council of Ministers considers proposals, the ________ appoints an ad hoc
working party composed of government officials from the member states.
a) European Commission
b) Committee of Permanent Representatives
c) Council of Financial Affairs
d) Court of First Instance
Answer:
The nonmarket environment of a firm is characterized by four I’s: issues, interests,
institutions, and ________.
a) innovation
b) information
c) ideas
d) independence
Answer:
Milton Friedman argued that the social responsibility of business is to ________
a) reduce the trust gap between global companies and NGOs
b) identify duties based on conceptions of well-being, rights, and justice
c) minimize shareholder value
d) maximize profits
Answer:
The Rawlsian choice allows more-advantaged people to ________.
a) maintain economic inequities in the society
b) pursue their interests resulting in greater aggregate well-being than with
egalitarianism
c) ignore instrumental rights
d) maintain status quo by restricting opportunities to the less-advantaged people
Answer:
Which of the following scenarios portrays morally motivated nonmarket action?
a) an automobile company launched a new range of low-cost environment friendly
hybrid cars
b) a customer of a marketing company launched an internet campaign to raise
awareness of the company’s mismanagement of charity funds
c) a reputed MNC acquired a smaller company in order to diversify
d) the brand management team of a food and beverage company launched an
advertisement for their new “all natural” beverage that uses 100 percent natural
ingredients
Answer:
Which of the following is true of the relationship between social responsibility and
compliance with laws?
a) Criminal prosecution can occur under antitrust laws, securities and exchange laws,
certain environmental laws, and many others.
b) Criminal law is not applicable to either firms or their managers.
c) Violations in business rarely lead to more stringent laws.
d) Individual managers and corporations are not liable for damages under statutory
laws.
Answer:
Which of the following is true with regard to the Obama administration’s $787 billion
economic stimulus program?
a) Most Americans benefitted from the stimulus as the employment rate reached a
record high.
b) First-time homebuyers were denied tax credits under the program.
c) Income tax rates were not reduced under the program but withholding rates were.
d) No tax credit was given under the Making Work Pay program.
Answer:
Alternatives that are contrary to the law or company policy are eliminated in the
________ stage of the framework for the analysis of nonmarket issues.
a) analysis
b) choice
c) enforcement
d) screening
Answer:
Write short notes on the Volcker rule.
Answer:
Even Friedman’s dictum to maximize profits is subject to the limits of the law and
ethical custom, both of which leave a gray area between what is clearly responsible and
what is clearly irresponsible. Under such circumstances, where should managers obtain
guidance from?
Answer:
Why do activists play an important role in the nonmarket environment?
Answer:
Describe four factors that affect the effectiveness of private politics social pressure.
Answer:
What are the sources of guidance for firms and their managers in a situation in which
payments are either demanded or likely to obtain a sale? What does the ethics analysis
focus on?
Answer:
Discuss the Directive on Data Protection at the EU level.
Answer:
What are the two basic forms of manipulation in business nonmarket activity?
Answer:
What is the balance scorecard?
Answer:
Write a short note on the tasks of the European Commission and the Council of
Ministers.
Answer:
Write a short note on the competitive theory of international trade.
Answer:
What are Donaldson’s five guidelines to ethical leadership?
Answer:
Reputations are easier to build than dissipate. Discuss.
Answer:
Discuss the various aspects of the Trade-Related Aspects of Intellectual Property Rights
(TRIPS).
Answer:
What are the criticisms of the Kantian ethics system?
Answer:
What is the distributive politics spreadsheet?
Answer:
How did the United States of America respond to the Kyoto protocol? What were the
principal approaches adopted by the United States of America with respect to the
protocol?
Answer:
State the purpose behind the establishment of the Federal Reserve System and briefly
explain its function.
Answer: