40. In 2002, Congress passed what legislation seeking to prevent business scandals by increasing corporate responsibility
through imposing additional corporate governance requirements on publicly held corporations?
a. The Securities and Exchange Act
b. The Sarbanes-Oxley Act
c. The Kohlberg Act
d. The Uniform Commercial Code
41. The ethical decision-making approach that views ethical decisions from the actor’s perspective and then judges
whether the decisions were ethical is:
a. ethical fundamentalism.
b. absolutism.
c. situational ethics.
d. act utilitarianism.
42. True cost-benefit analysis as a social theory:
a. only measures monetary gains and losses in making business decisions.
b. compares direct and indirect costs and benefits of program alternatives for meeting a specific goal.
c. is another theory that judges persons’ actions by what those persons believe is right for themselves.
d. emphasizes justice and a central moral authority.
43. Arguments favoring social responsibility of business entities include all but which of the following?
a. Corporations are subject to a higher standard of accountability than are public bodies.
b. Limited liability granted to corporations carries a responsibility to contribute to society’s betterment.
c. Corporate involvement in social causes makes good business sense.
d. The more responsibly companies act, the less regulation the government must provide.
44. In what way or ways are situational ethics and ethical relativism similar?
a. They both look to a central authority or set of rules to guide ethical decision-making.
b. They both assess each separate act according to whether it maximizes pleasure over pain.
c. They both judge actions from the perspective of the person who actually made the judgment.
d. All of these are true.
45. To a(n) , whether telling a lie in a given instance would produce greater pleasure than telling the truth is less
important than deciding if a general practice of lying would maximize society’s pleasure.
a. deontologist
b. rule utilitarian
c. ethical fundamentalist
d. ethical relativist
46. How does Immanuel Kant’s approach to ethical decision-making differ from that of an ethical fundamentalist?
a. Kant’s approach is premised on man’s rationality and not on principles handed down from above.
b. Kant‘s approach stresses liberty and not justice.
c. Kant’s approach judges society in moral terms by how it distributes goods and services.
d. Kant’s approach assesses each separate act according to whether it maximizes pleasure over pain.
47. Kohlberg observed that people progress through stages of moral development according to the major variables of:
a. age and education.
b. age, economic status, and peer influence.
c. education and family guidance.
d. religion, education, and the influence of peers and family.
48. Under which ethical system would it be ethical to compel a few citizens to undergo painful or fatal medical tests in
order to develop cures for the rest of the world?
a. Utilitarianism
b. Ethical fundamentalism
c. Distributive justice
d. Libertarianism
49. The definition of business ethics includes which of the following points?
a. It is a science completely separate from applied ethics.
b. It is fully codified in federal statutes.
c. It has a central authority and universal standards.
d. It seeks to determine what is good and right in business settings.
50. According to Jack Behrman, a professor of business ethics, free enterprise involves a:
a. combination of properties.
b. capitalistic combination of factors of production.
c. group expression of the use of private property.
d. All of these are true.
51. Which arguments oppose business involvement in socially responsible activities?
a. Lack of corporate focus on profitability.
b. Unfairness to company employees and shareholders.
c. Lack of accountability.
d. All of these are true.
52. Nineteen-year-old Martin was raised in a good, Christian home and attended parochial school through eighth grade.
Martin is a good student and citizen who conforms to the expectations of his church, family, and peers. He does so
because he loves his family and church, is loyal to them, and trusts them. Under Kohlberg’s schematic analysis,
Martin is most likely at what stage of moral development?
a. Preconventional
b. Conventional
c. Postconventional
d. Universal
53. A common criticism of deontological ethical theories is that they:
a. are excessively pragmatic.
b. are rigid and excessively formal.
c. only consider actions by their motives.
d. fail to consider universal principles.
54. A common criticism of ethical relativism is that it:
a. promotes open-mindedness and tolerance.
b. assumes that a person‘s actions are always correct for that person, but if that is true, then all behavior is, by
definition, moral.
c. is rigid and excessively formal.
d. is too judgmental.
55. The type of moral equality espoused by John Rawls is:
a. freedom to do what one wishes.
b. social and material equality.
c. freedom from government regulation.
d. equality of opportunity, not of results.
56. An auto designer chooses to devote his efforts to designing an automobile that is the safest vehicle possible. He does
so because he wishes to save lives and prevent disabling injuries. He believes he and his employer have a duty to
provide the public with the safest possible vehicle. The designer’s approach to ethical decision-making is best
characterized as:
a. utilitarian.
b. deontological.
c. ethically relative.
d. ethically fundamental.
57. Adam Smith, in The Wealth of Nations, said the capitalistic system was composed of institutions which include all
but which of the following?
a. Economic motivation
b. Free enterprise
c. Labor
d. Limited government
58. Analyze whether telling a lie is unethical in terms of each of the following ethical theories.
a. The approach of Immanuel Kant and his “categorical imperative.”
b. Utilitarianism.
c. Intuitionism and the “Television Test.”
d. Ethical relativism.
e. Ethical fundamentalism.
59. Neal is the young, likable, optimistic, and generous son of a prominent public official. He has a master’s degree in
business and is the business partner of Ken and Bill in an oil drilling and exploration business. Neal also serves as a
director on the board of the Bonanza Savings and Loan Association. While serving on the Bonanza Board, Neal
votes to approve major loans to Ken and Bill without disclosing to the other directors that he is a business partner of
Ken and Bill. Neal also personally arranges for a $900,000 line of credit from Bonanza for an oil drilling venture in
which he is a partner with Ken. The drilling venture is unsuccessful and Ken and Bill both default on their loans to
Bonanza, which then causes the S & L to become insolvent. Federal banking officials, who then liquidate its assets
to pay its creditors and depositors, seize Bonanza. Because Bonanza is federally insured, a substantial amount of tax
money is also used to pay off depositors whose deposits are insured under federal programs. Bonanza shareholders
lose their investment money. Was Neal’s conduct as a director of Bonanza ethical? Analyze his conduct in light of
the following ethical theories.
a. Intuitionism and the “Television Test.”
b. Milton Friedman’s ideas on corporate governance.
c. Deontological theories.
d. Rule utilitarianism.
e. Ethical relativism.
60. Compare the social ethics theories of distributive justice and libertarianism. How are they alike? How are they
different? Explain your answer.
61. Discuss each of the following ethical theories with regard to whether you accept or reject it for your own actions
and decisions.
a. Intuitionism and the “Television Test.”
b. Rule Utilitarianism.
c. Ethical Relativism.
d. Ethical Fundamentalism.
e. The deontological approach.
f. Milton Friedman’s ideas on corporate governance.
62. Discuss which of the social ethics theories listed below you most agree with and why. Discuss your reasons for
disagreeing with the others.
a. Distributive justice
b. Social egalitarianism
c. Libertarianism
63. Through his observation of human behavior, psychologist Lawrence Kohlberg developed a model of moral
development. Describe the stages of moral development that were studied and developed by Kohlberg and the
relevance of this model for ethical business behavior.