87. Each Saturday night, someone in the community called the local police to control the noisy, riotous activity at Billy
Bob’s Tavern. However, Mr. Bob never took action on his own and ignored the problem. Eventually, local residents
forced him out of business. Mr. Bob might be in business today had he
a. been less responsive to the community’s needs.
b. simply reopened his business in the same location.
c. worked more with the community to solve the problem.
d. read all complaint letters over coffee.
e. asked the police to stop bothering him.
88. Harold Finn III and his son, father, and grandfather gathered last week to compare notes on the business. Harold’s
grandfather started the business in 1928. His father became active in 1947, Harold in 1965, and his son in 1983.
During their conversations, they discovered that many things about the past were similar to conditions today,
although others were quite different. For example, after the 1930s,
a. government protection of workers and consumers increased.
b. working conditions were often deplorable by today‘s standards.
c. there was a period of laissez-faire business conditions.
d. the average work week under the law once exceeded fifty hours.
e. businesses were free to operate pretty much as they chose.
89. In the first three decades of the twentieth century, working conditions were horrible and dangerous, and abuses
were common. Most people of the time believed these abuses would be rectified by
a. strict government action to punish the offenders.
b. a shift to a communist economy.
c. consumer advocacy groups who promoted social responsibility.
d. competition and interaction in the marketplace.
e. returning to a less industrialized society.
90. Which president led the way in creating programs to improve the working and social conditions in the United States
in the 1930s?
a. Theodore Roosevelt
b. Calvin Coolidge
c. Franklin Roosevelt
d. Woodrow Wilson
e. Herbert Hoover
91. What led most directly to increased government involvement with regulating business and its dealings with society?
a. The Industrial Revolution
b. President Kennedy’s consumer bill of rights
c. The collapse of the oil industry
d. The Great Depression
e. The end of World War I
92. With whom does social responsibility of business have to begin?
a. Government
b. Management
c. Consumers
d. Consumer protection groups
e. Society
93. The manager of a large chain recently spoke to a group of college students about making it in the business world.
He focused particularly on the importance of fulfilling the purpose of the business organization: that is, to produce
and market profitable products needed by society. In so doing, he indicated that a stockholder, not the society as a
whole, invests in a corporation to earn a return on his or her investment and that a firm is legally obligated to act in
stockholders’ interests. What concept do the manager’s comments reveal?
a. Socioeconomic model of social responsibility
b. Economic model of social responsibility
c. Strictest model of social responsibility
d. Consumerism
e. Rights of employees
94. The economic model of social responsibility places primary emphasis on
a. quality of life.
b. active government involvement.
c. conservation of natural resources.
d. economic return.
e. the balance of economic return and social return.
95. The economic model of social responsibility was developed in a period when the primary concern of firms was
a. long-term success and profitability.
b. improving the quality of life.
c. short-run profits and survival.
d. complete customer satisfaction and expansion.
e. having safe and satisfied employees.
96. The manager of a successful local restaurant believes his responsibilities are to provide delicious meals and
excellent service, provide jobs, comply with laws and the IRS, and earn a respectable profit on the restaurant.
These are the manager’s only concerns. What concept does this indicate?
a. Socialism
b. The economic model of social responsibility
c. The socioeconomic model of social responsibility
d. Consumer protectionism
e. A lack of social responsibility
97. “We are busy producing and marketing profitable products for society to enjoy! Now you want us to provide legal
services, day–care centers, and counseling for AIDS victims and alcohol and drug abusers. If we do all these things,
what role will the government, church, and family play?” exclaimed the vice president of Milam Corporation. This
manager’s comments reveal what concept?
a. The socioeconomic model of social responsibility
b. The economic model of social responsibility
c. The strictest model of social responsibility
d. The need to preserve management rights
e. Consumerism
98. By establishing Ronald McDonald Houses, temporary lodging for individuals with seriously ill family members,
McDonald‘s has committed itself to more than just shareholder wealth maximization. The corporation’s active role
in improving societal conditions suggests that it is responsive to which of the following arguments?
a. Corporate resources should be devoted to maximizing profits, not to solving society‘s problems.
b. Individual businesses should not be responsible for solving problems that affect all of society.
c. Socially responsible actions by business firms increase the role of government in business.
d. Businesses are ill-equipped to handle today‘s complex social issues.
e. Social responsibility promotes environmental stability and long-run profitability.
99. The socioeconomic model of social responsibility places primary emphasis on
a. quality of life.
b. production.
c. economic return.
d. exploitation of natural resources.
e. profit.
100. You have been asked to complete this year’s social responsibility report for the insurance industry. Which of the
following statements would you include as a valid indication of socially responsible activities in this industry?
a. This year, we sold more insurance policies than in the previous two years.
b. This year marked a 200 percent increase in the number of new insurance products and services available to
customers.
c. To date, few women and minorities hold management positions in the insurance industry.
d. This year, more than 300,000 volunteer hours were contributed by companies through loaned executives and
release-time (time off) arrangements.
e. Fewer than one-eighth of the companies’ charitable contributions go to people-related activities.
101. Which of the following statements reflects the socioeconomic model of social responsibility?
a. “I did it my way!” —Frank Sinatra
b. “It‘s easier and better to ban smoking than to risk multimillion-dollar lawsuits.” —a university professor
c. “It’s an absolutely preposterous proposal. The idea that any corporation has the right to reach beyond
company gates to what you could even describe as the bedroom of the employee is ridiculous.” —a
spokesperson for the Tobacco Institute
d. “In the private sector, employers can get away with quite a bit.” —an attorney
e. “We will not allow our motion pictures to be shown in any movie house in South Africa unless it is fully
integrated.” —the president of United International Pictures Corporation
102. Roger, a bank manager, holds the economic model of social responsibility view. What is he most likely to say about
the connection between taxes and social responsibility?
a. Because he is a responsible man, he pays his taxes and does not try to cheat the IRS.
b. Although taxes contribute to social welfare, it is only the beginning of his bank‘s responsibility to society.
c. Taxes are a required evil from which he sees very little benefit in his community.
d. By making a profit and paying taxes that meet the needs of society, Roger has fulfilled his social
responsibility.
e. It is better to make a small profit and therefore pay less taxes than to contribute to social responsibility.
103. Joe, a restaurant supplies and equipment business manager, believes in the economic model of social responsibility.
Which of the following would most likely be a quote from Joe in relation to social responsibility?
a. “What a waste of time for everyone!”
b. “I fully support it.”
c. “That is someone else’s job.”
d. “It’s expensive, but worth it.”
e. “Not in my line of work.”
104. Long-distance providers are becoming increasingly concerned about certain activities within their industry. Various
companies come together voluntarily to implement new standards of social responsibility that members must abide
by. What seems to be the primary motivation in this case for an increased interest in social responsibility?
a. Because corporations are creations of society, they are responsible for giving back to the communities in
which they operate.
b. These companies have realized it is in their best interest to increase their social responsibility before they are
once again subject to stricter regulations.
c. These companies are using social responsibility as a means to increase their profitability, both short term and
long term.
d. Long-distance providers have started taking pride in their industry and its record for social responsibility.
e. They feel a responsibility to their stockholders, employees, the government, investors, and society as a whole.
105. Which of the following is an argument for increased social responsibilities?
a. Because business is part of our society, it cannot ignore social issues.
b. Management must be concerned with providing a return on owners’ investments.
c. Corporate time and money should be used to maximize profits.
d. Individual businesses should not be expected to solve society‘s problems.
e. Social issues are the responsibility of government officials.
106. “We are busy producing and marketing profitable products for society to enjoy! Now you want us to provide legal
services, day–care centers, and counseling for AIDS victims and alcohol and drug abusers. If we do all these things,
what role will the government, church, and family play?” exclaimed the vice president of Milam Corporation. What
persuasive argument would you use to influence this manager to become more socially responsive?
a. Business has the technical, financial, and managerial resources needed to tackle today’s complex economic
issues.
b. Social problems affect society in general, so individual businesses probably should not be expected to solve
these problems.
c. By helping to solve social issues, business can create a more stable environment for long-term profitability.
d. Socially responsible decision making by business firms will not prevent increased government intervention,
which only forces businesses to do what they fail to do voluntarily.
e. Corporate time, money, and talent should be used to maximize profits, not to solve society‘s problems.
107. The socioeconomic model of social responsibility
a. holds that society will benefit most when business is left alone to produce and market profitable products.
b. emphasizes that social responsibility is someone else’s responsibility.
c. holds that a firm is legally obligated to act in the economic interests of its stockholders.
d. states that managers who concentrate on profit indirectly fulfill their social responsibilities.
e. emphasizes profits as well as the effect of business decisions on society.
108. Supporters of increased social responsibility would most likely say that the goal of a firm is to
a. maximize shareholders’ wealth.
b. provide jobs for the community and make a reasonable profit.
c. maximize profits while obeying the law.
d. beat the competition and stay in business.
e. create value and benefits for owners, employees, and society.
109. All of the following are arguments against increased social responsibility except
a. social issues are the responsibility of government officials elected for that purpose.
b. companies should maximize profits, not solve society‘s problems, with their time, money, and talent.
c. because social problems affect society in general, businesses should not be expected to solve these
problems.
d. social responsibility by firms can prevent increased government intervention.
e. business managers are primarily responsible to stockholders and providing them a good return.
110. Which of the following best describes the trend in social responsibility models used by companies?
a. Most companies are changing from a socioeconomic approach to an economic approach to social
responsibility.
b. There has really been no pattern of change over the last century because most companies take a
socioeconomic approach.
c. There has been a sporadic shift back and forth between the economic and socioeconomic model as the best
business solution.
d. Relatively little transformation has left the economic model as the philosophy for most businesses.
e. More companies have been bypassing the economic model in favor of the socioeconomic model in recent
years.
111. Which of the following is an argument against social responsibility?
a. Business has resources needed to tackle today’s complex social issues.
b. Because business is a part of our society, it cannot ignore social issues.
c. Corporate time, money, and talent should be used to maximize profits.
d. By helping resolve social issues, business can create a more stable environment.
e. Socially responsible decision making by firms can prevent increased government intervention.
112. Primary emphasis in the economic model of social responsibility is on
a. quality of life.
b. conservation of resources.
c. market-based decisions.
d. production.
e. firm’s and community’s interests.
113. Karen is the assistant manager of a midsized logistics firm. She believes her manager, Michael, has become carried
away with supporting nonprofit organizations and encouraging employees to do community service. What argument
would Karen most likely use to turn Michael to her point of view?
a. Socially responsible decision making by firms can prevent increased government regulation.
b. Social problems affect society in general, so it is important to protect our society.
c. The company’s time and money should be spent maximizing the owner’s wealth, not solving society’s
problems.
d. By contributing to social issues, business will decrease its opportunity for long-run profitability.
e. The logistics business has unique resources that could be used to address serious social issues.
114. By ensuring that products are safe and reliable, the Food and Drug Administration and the Consumer Product
Safety Commission are taking part in a movement known as
a. protectionism.
b. consumerism.
c. product activism.
d. socialism.
e. product liability management.
115. Which president stated that consumers have the right to safety, to be informed, to choose, and to be heard?
a. Franklin D. Roosevelt
b. Dwight D. Eisenhower
c. Lyndon B. Johnson
d. John F. Kennedy
e. George H. Bush
116. is all activities undertaken to protect the rights of consumers.
a. Consumerism
b. Bill of rights
c. Lobbying
d. Caveat emptor
e. Protectionism
117. What two additional rights have been added to Kennedy’s original Consumer Bill of Rights?
a. Right to choose and right to satisfaction
b. Right to listen and right to education
c. Right to consumer education and right to service
d. Right to service and right to privacy
e. Right to reparation and right to privacy
118. The Audi 5000S was investigated because of reported instances of unintended acceleration. The investigating body
concluded that the acceleration was not a result of a system malfunction but was due instead to driver error.
However, they also said that the awkward placement of the brake and accelerator pedals was the primary
contributor to these driver errors. By designing this part of the 5000S in an ergonomically inefficient manner, Audi
ignored which of the four basic rights of consumers?
a. The right to be informed
b. The right to choose
c. The right to safety
d. The right to be heard
e. The right to comfort
119. Whirlpool fails to provide an instruction manual with a certain type of new washing machine. Which basic
consumer right does Whirlpool’s action violate?
a. The right to convenience
b. The right to choose
c. The right to be heard
d. The right to safety
e. The right to courteous service
120. Erin decides to try out her new iron on the pesky wrinkles she has on her legs. She suffers rather severe burns and
is infuriated with the manufacturer because she feels her right to safety has been violated. Is Erin correct?
a. Yes, the right to safety implies that a customer will never be injured by a product.
b. Yes, the iron should have been recalled when this defect was first discovered.
c. No, products must be safe for their intended use, and Erin’s experiment was clearly beyond the intended use.
d. No, as long as the instructions mentioned that when ironing skin burns sometimes occur, they are not to
blame.
e. No, the company instead violated her right to choose.
121. MasterCard sends a customer a memo that discloses the true cost of borrowing with each billing statement. It does
this because it realizes that the customer has the right to
a. choose.
b. obtain credit.
c. be heard.
d. be informed.
e. safety.
122. The motion picture industry uses a rating system to describe the content of its movies. Movies are accompanied by
ratings such as PG (parental guidance suggested) or R (not suitable for those under 17). This rating system satisfies
consumers’ right to
a. be heard.
b. safety.
c. be informed.
d. censorship.
e. watch what they want to watch.
123. A credit card company is offering an annual percentage rate of 3.9 percent. However, the company fails to
mention that this is an introductory rate, and when consumers receive their bills after six months the rate increases
to 21.9 percent. The consumers feel their right to has been abused.
a. be treated fairly
b. be informed
c. safety
d. be heard
e. service
124. One reason American business must be concerned about product safety is that
a. labor unions will demand better contracts.
b. the government will increase its requirements for disclosure.
c. consumers demand safe products.
d. companies will be banned from competing.
e. limitations will be placed on the sale of products.
125. Product labels on detergent that indicate ingredients and laundering methods are examples of which provision of
Kennedy’s Consumer Bill of Rights?
a. The right to be heard
b. The right to choose
c. The right to purchase
d. The right to be informed
e. The right to safety
126. Wonder Bread advertised that its bread “builds strong bodies.” This claim was considered deceptive and thus a
violation of the consumer’s right to . The claim was a violation not because it was untrue but because the
same claim was true of other breads, and people seeing the advertisement might have thought that Wonder Bread
was unique.
a. safety
b. be heard
c. be informed
d. choose
e. life