1. identified four cultural dimensions that can have a profound impact on the business environment:
individualism/collectivism, power distance, uncertainty avoidance, and masculinity/femininity.
a. Milton Friedman
b. Abraham Maslow
c. Adam Smith
d. Geert Hofstede
e. John Maynard Keynes
2. products encourage consumers to return and buy more. This approach is also known as planned
obsolescence.
a. Laissez-faire
b. Dumping
c. Collectivistic
d. Made-to-break
e. Multinational
3. is a term used by Adam Smith to explain the inherent mechanisms at work in free market systems that keep
commerce in equilibrium. It is also known as the “invisible hand.”
a. Consumerism
b. Cultural relativism
c. Social democracy
d. Laissez-fair
e. Bimodal wealth distribution
4. assumes that humans may not act rationally because of genetics, learned behavior, and rules of thumb.
a. Rational economics
b. Socialism
c. Cultural relativism
d. National culture
e. Behavioral economics
5. Which of the following statements about multinational corporations (MNCs) is false?
a. MNCs are corporate organizations that operate on a global scale without significant ties to any one nation or
region.
b. MNCs are inherently unethical and always do harm in the countries in which they operate.
c. MNCs are characterized by a global strategy of focusing on opportunities throughout the world.
d. Some MNCs are so large and powerful that their revenues are greater than the gross domestic products of
many countries.
e. Because of their size and power, MNCs have been the subject of much criticism and the source of a number
of ethical issues.
6. Increasing the wealth gap between nations and misusing and misallocating scarce resources are ethical issue
accusations related to
a. cultural differences.
b. multinational corporations.
c. consumerism.
d. legal differences.
e. international negotiations.
7. Which of the following is not a criticism of or charge against multinational corporations (MNCs)?
a. They transfer jobs overseas, where wage rates are lower
b. They increase the gap between rich and poor nations
c. They pay excessively high taxes everywhere
d. They exploit the labor markets of host countries
e. They have an unfair advantage when competing with local businesses
8. Which of the following is a measure taken by governments to curtail MNC practices that create ethical issues?
a. Levying import taxes to lower the prices MNCs charge for their products
b. Halting the establishment of minimum wage laws
c. Avoiding the United Nations’ monitoring efforts
d. Preventing the formation of labor unions
e. Imposing export taxes to force MNCs to share more of their profits
9. occurs when the middle class shrinks, resulting in highly concentrated wealth amongst the rich and a large
number of poor people with very few resources.
a. Communism
b. Socialism
c. Bimodal wealth distribution
d. A two-class social structure
e. Laissez-faire capitalism
10. An unconscious reference to one‘s own cultural values, experiences, and knowledge is referred to as the
a. cultural reference criterion.
b. unconscious cultural criterion.
c. cultural–self criterion.
d. self-reference criterion.
e. unconscious cultural-self criterion.
11. When in Rome, do as the Romans do, or you must adapt to the cultural practices of the country in which you
are operating are rationalizations businesspeople sometimes offer for straying from their own ethical values when
doing business abroad. This practice is called
a. self-reference criterion.
b. country cultural values.
c. consumerism.
d. cultural relativism.
e. dumping.
12. involves transactions across national boundaries. It is a practice that brings together people who have
different cultures, values, laws, and ethical standards.
a. Global business
b. Country cultural values
c. Social democracy
d. Cultural relativism
e. Bimodal wealth distribution
13. What concept refers to economic theories advocating the creation of a society where wealth and power are
distributed evenly, relative to the amount of work expended in production?
a. Rational economics
b. Socialism
c. Capitalism
d. Rational capitalism
e. Fascism
14. Risk compartmentalization occurs when
a. companies place their most problematic employees into separate profit centers so that they cannot influence
one another to act unethically.
b. all profit centers within a corporation are aware of the code of ethics.
c. all profit centers within an organization become aware of the consequences of competitors’ actions.
d. various profit centers within an organization become unaware of the consequences of their actions on the firm
as a whole.
e. ethics and compliance programs reduce the risk of misconduct.
15. has been codified in a United Nations document and is defined as an inherent dignity with equal and
inalienable rights as the foundation of freedom, justice, and peace in the world.
a. Cultural relativism
b. Human rights
c. Consumerism
d. Dumping
e. Health care
16. Power distance dimension refers to the “power inequality” between superiors and subordinates. Which of the
following countries probably ranks high on the power distance scale?
a. Saudi Arabia
b. Austria
c. England
d. Denmark
e. Sweden
17. Who argued during the 1930s that the state could stimulate economic growth and improve stability in the private
sector?
a. Adam Smith
b. John Maynard Keynes
c. Milton Friedman
d. Herbert Hoover
e. Geert Hofstede
18. The practice of charging high prices for products sold in home markets while selling the same products in foreign
markets at low prices, which do not cover the costs of exporting, is known as
a. price discrimination.
b. price gouging.
c. dumping.
d. skimming.
e. loading.
19. assume(s) that a the market, through its own inherent mechanisms, will keep commerce in equilibrium.
a. Social democracy
b. Laissez-faire economics
c. Economics
d. Multinational corporations
e. Rational economics
20. Those who ascribe to consumerism
a. believe that consumers should purchase everything they can afford.
b. do not believe in taxes on locally made products.
c. believe that consumers should own the means of production.
d. believe that consumers, not producers, should dictate the economic structure of a society.
e. believe that corporations should have the freedom to do whatever they want.
21. is based upon the assumption that people are predictable and will maximize the utility of their choices relative
to their needs and wants.
a. Rational economics
b. Socialism
c. Capitalism
d. Behavioral economics
e. Consumerism
22. allows for private ownership of property and features a large government equipped to offer such services as
education and health care to its citizens
a. Democracy
b. Communism
c. Socialism
d. Capitalism
e. Social democracy.
23. assumes that economic decisions are influenced by human behavior.
a. Rational economics
b. Socialism
c. Capitalism
d. Rational capitalism
e. Behavioral economics