The Legal Environment of Business and Online Commerce, 7e (Cheeseman)
Chapter 2 Ethics and Social Responsibility of Business
1) All laws are framed to meet the highest ethical standards.
2) An ethically wrong state or condition can still be legal.
3) The False Claims Act permits private parties to sue the government on behalf of a corporation.
4) The False Claims Act grants the private party a share in the monetary recovery made in a
whistleblower case.
5) Under ethical fundamentalism, a person looks to an outside source for ethical rules or
commands.
6) The main criticism for ethical fundamentalism is that it does not allow people to decide what
is right or wrong for themselves.
7) Utilitarianism postulates doing the greatest good for the greatest number of people.
8) Kantian ethics is also known as duty ethics.
9) Kant believed that people owe moral duties that are based on universal rules.
10) Kantian ethics is based on the premise that people can use reasoning to reach ethical
decisions.
11) In Kantian ethics, the principle of inconsistency postulates treating all ethical cases
differently.
12) According to Kantian ethics, one would be obligated to abide by a contract even if that
contract turns out to be detrimental to the obligated party.
13) Kantian ethics distinguishes between the morality one uses to judge others and the morality
one uses on oneself.
14) The social contract theory is derived from Rawls’s social justice theory.
15) According to Rawls’s social justice theory, a person who is in a state of “veil of ignorance” is
best fit to select the fairest possible ethical principles.
16) According to Rawls’s social justice theory, moral duties are based on an implied social
contract.
17) Ethical relativism holds that moral standards ought to be based on an individual’s feelings of
what is right or wrong.
18) According to ethical relativism, an action that is usually thought to be unethical would not be
considered unethical if the perpetrator thought it was ethical.
19) The traditional view of social responsibility of business emphasized maximizing profits for
employees rather than shareholders.
20) The theory of moral minimum emphasizes correcting social injuries caused by a business.
21) The theory of moral minimum stresses on making profit even while causing harm to others.
22) There are no specific governmental laws endorsing a moral minimum of social responsibility
on corporations.
23) Section 406 of the Sarbanes-Oxley Act requires a public company to disclose whether it has
adopted a code of ethics for senior financial officers.
24) The theory of stakeholder interest compels a corporation to consider the effects of its actions
specifically on shareholders.
25) The theory of corporate citizenship contends that corporations owe a duty to promote the
same social goals as individual members of society.
26) ________ is a set of moral principles or values that governs the conduct of an individual or a
group.
A) Rationality
B) Evolution
C) Ethics
D) Reason
27) Which of the following cases describes an agreement of ethics and laws?
A) A company outsourcing its jobs to a foreign country.
B) A person being penalized for bribing a judge to rule a case in the person’s favor.
C) A company not spending more money to keep its emission rates below the legal standard.
D) A person hiring an illegal alien worker whose family is in destitute.
28) ________ is an ethical theory where a person adheres to rules or commands that are from an
outside source, like a book or a central figure.
A) Ethical fundamentalism
B) Utilitarianism
C) Ethical relativism
D) Rawls’s social justice theory
29) ________ Act is a federal statute that permits private parties to sue companies for fraud on
behalf of the government and share in any monetary recovery.
A) Business Norms
B) Sarbanes-Oxley
C) Glass-Steagall
D) False Claims
30) Jules Renton, a financial accountant at Valkyrie Aviations, deals with the accounts Valkyrie
has with the government. Valkyrie Aviations are in contract with the government to deliver a
new bomber plane called Spearhead. While reviewing the Spearhead account, Renton noticed
that Valkyrie has been falsely billing the government for Spearhead’s production. If Renton
chooses to be a whistleblower and expose the scam to the government, what Congress enacted
statute must he invoke?
A) Business Norms Act
B) Sarbanes-Oxley Act
C) Glass-Steagall Act
D) False Claims Act
31) A government or political party that strictly derives its ethics and laws based on a specific
religious book is an example of ________.
A) utilitarianism
B) ethical fundamentalism
C) ethical relativism
D) Kantian ethics
32) Which of the following statements describes the moral theory of utilitarianism?
A) People must choose the action or follow the rule that provides the greatest good to society.
B) People must follow actions that are in accordance with a specific moral rule or principle from
a religious text.
C) People must choose to follow actions of a virtuous person.
D) People must follow actions based on moral duties imparted from one’s community.
33) Which of the following is an apparent disadvantage of utilitarianism?
A) It does not allow people to have subjective notions of right and wrong.
B) It is based on moral duties derived from universal rules.
C) It puts too much emphasis on one book or theory.
D) It treats morality as if it were an impersonal mathematical calculation.
34) Which of the following moral theories lays emphasis on morality based on one’s moral
duties?
A) moral relativism
B) utilitarianism
C) Kantian ethics
D) ethical fundamentalism
35) Which of the following moral theories would closely follow the categorical imperative “Do
unto others as you would have them do unto you?”
A) Kantian ethics
B) moral relativism
C) utilitarianism
D) Rawls’s social justice theory
36) ________ is a moral theory which says that people owe moral duties that are based on
universal rules.
A) Rawls’s social justice theory
B) Kantian ethics
C) Utilitarianism
D) Moral relativism
37) Reversibility is a principle of Kantian ethics which says that ________.
A) a person must be allowed to reverse his moral judgment to better suit his needs
B) a person must treat all moral circumstances as one
C) a person must be allowed to selectively choose moral judgments based on the circumstances
D) a person must abide by the rule he or she uses to judge the morality of someone else’s conduct
38) Consistency is one of the two important principles of ________ upon which its universal
laws are based.
A) utilitarianism
B) Kantian ethics
C) Rawls’s social justice theory
D) moral relativism
39) Which of the following is a perceived disadvantage of Kantian ethics?
A) It treats morality as if it were an impersonal mathematical calculation.
B) It does not allow people to have subjective notions of right and wrong.
C) It is based on universal rules that have no common consensus.
D) It distinguishes between the morality one uses to judge others and the morality one uses on
oneself.
40) Portman, who runs a computer hardware store, had signed a contract with Stewie Inc. to
deliver 125 computer monitors. He was to deliver it by the 5th of August, but by the 3rd of
August, Portman could not arrange for the monitors, as his usual supplier was not available.
Portman then decided to go to another supplier who had a higher selling price rather than cancel
the contract with Stewie Inc. as he believed it was his duty to do so. What of the following moral
theories matches Portman’s behavior?
A) Kantian ethics
B) utilitarianism
C) Rawls’s social justice theory
D) moral relativism
41) How are ethical rules established in Kantian ethics?
A) by a set of universal rules that are based on consistency and reversibility
B) by following principles that have been derived from holy books
C) by an individual’s feelings on what is right and wrong
D) by choosing the alternative that’s best for society as a whole
42) ________ is a moral theory which asserts that fairness is the essence of justice.
A) utilitarianism
B) Kantian ethics
C) Rawls’s social justice theory
D) moral relativism
43) Which of the following theories of morality is Rawls’s Social Justice Theory fundamentally
derived from?
A) the theory of utilitarianism
B) the theory of ethical fundamentalism
C) the social contract theory
D) the theory of moral relativism
44) Which of the following is a perceived disadvantage of Rawls’s social justice theory?
A) It allows for those in advantageous positions to suppress people in least advantageous
positions.
B) It doesn’t consider the fact that people would not want to maximize benefits for the least
advantaged persons.
C) It only allocates people in advantageous positions to set up rules on morality.
D) It postulates that there are no universal ethical rules to guide a person’s conduct.
45) Which of the following moral theories matches the dictum “I will keep the rules if everyone
else does?”
A) perspectivism
B) social contract
C) moral relativism
D) utilitarianism
46) How are ethical rules established in Rawls’s social justice theory?
A) by a set of universal rules based on consistency and reversibility
B) from an original position of a veil of ignorance
C) by the ruling class or people in advantageous positions
D) by following what’s best for the society as a whole
47) ________ is a moral theory which holds that individuals must decide what is ethical based on
their own feelings about what is right and wrong.
A) Ethical relativism
B) Kantian ethics
C) Utilitarianism
D) Rawls’s social justice theory
48) Which of the following moral theories will help an anthropologist study ancient societies
with an impartial and unprejudiced mindset, especially when it relates to ethics and customs
followed by ancient societies to that being followed in present societies?
A) Rawls’s social justice theory
B) utilitarianism
C) Kantian ethics
D) ethical relativism
49) According to ethical relativism, ________.
A) ethics rely on duties based around universal rules which one is morally bound to follow
B) each person is presumed to have entered into a social contract with all others in society to
obey moral rules
C) there are no universal ethical rules to guide a person’s conduct
D) people must choose an action or follow a rule that provides the greatest good to society
50) What is “maximizing profits” as a social responsibility theory in business?
A) The theory that a corporation must consider the effects its actions have on persons other than
its shareholders.
B) The theory that a corporation’s duty is to make a profit while avoiding causing harm to others.
C) The theory that a corporation owes a duty to take actions that increases profits for
shareholders.
D) The theory that a business has a responsibility solely to its stakeholders that other than
shareholders.
51) A social responsibility theory of business which says that a corporation’s duty is to make a
profit while avoiding causing harm to others is referred to as ________.
A) stakeholder interest
B) corporate citizenship
C) maximizing profits
D) moral minimum
52) The ________ Act enacted by Congress in 2002, requires public companies to adopt codes of
ethics, and establishes criminal penalties for companies that partake in violations.
A) Glass-Steagall
B) Sarbanes-Oxley
C) False Claims
D) Business Norms
53) If Steve Templeton, after wagering all the factors, finds that the loss to the employees and
the community is far greater than the one incurred by the shareholders, and decides to keep the
plant open in Kantron. Which of the following moral theory matches Steve Templeton’s
approach in keeping the plant open?
A) Kantian ethics
B) Rawls’s social justice theory
C) ethical fundamentalism
D) utilitarianism
54) If Steve Templeton decides to not close the plant in Kantron, what business social
responsibility will Steve Templeton be achieving?
A) moral minimum
B) corporate citizenship
C) maximizing profits
D) stakeholder interest
55) If Steve Templeton decides to close the plant in Kantron, what important business social
responsibility will Steve Templeton accomplish?
A) moral minimum
B) corporate citizenship
C) maximizing profits
D) stakeholder interest
56) Sinbad Cola, a soft drink manufacturer, recently opened a plant in Buron. The wastages from
the plant were dumped in the Buron Sea, situated a mile away from the plant. Dumping of wastes
in the sea resulted in water pollution, which negatively affected the Buron fishing business, and
also resulted in groundwater contamination. Sinbad Cola compensated by bringing
contamination levels down with additional filters, and paying damages to the local fisheries.
Which theory of business social responsibility did Sinbad Cola meet when they compensated for
their harmful wastage disposal methods?
A) moral minimum
B) stakeholder interest
C) corporate citizenship
D) maximizing profits
57) ULab Inc., a biotechnology firm, recently had a fire in one of their offices which resulted in
the office building being gutted. The employees were not trained for a fire drill, and the 10-
storey building had no fire escape route which resulted in many employees being hospitalized for
physical injuries, burns and toxic smoke inhalation. What important social responsibility theory
was ULab negligent of by not training their employees in case of a fire and not installing a fire
exit?
A) corporate citizenship
B) moral minimum
C) stakeholder interest
D) maximizing profits
58) ________ is a social responsibility theory of business which says that a corporation must
consider the effects its actions have on persons other than its shareholders.
A) Corporate citizenship
B) Maximizing profits
C) Moral minimum
D) Stakeholder interest
59) What is “corporate citizenship” as a social responsibility theory in business?
A) Businesses are responsible to even helping solve social problems that it did not cause.
B) Businesses owe a duty to take actions that increase profits for shareholders.
C) Businesses have a responsibility solely to its stakeholders, and should strive to maximize their
well-being.
D) Businesses are obliged to consider the effects its actions have on persons other than its
shareholders.
60) Conch Corporation, a global oil and gas company, has plans to open a subsidized
postsecondary vocational school in the town of Cristen, where one of their offices is situated.
The plan was put to vote and approved despite some objection from shareholders. The school is
being opened in collaboration of the local government, and the objective is to help the youth of
that neighborhood, especially dropouts, learn a vocational skill. What social responsibility theory
describes Conch Corporation’s move to open the school?
A) moral minimum
B) maximizing profits
C) corporate citizenship
D) stakeholder interest
61) Give an account of the relationship between ethics and law.
62) Explain the two principles used to derive the universal rules of Kantian ethics?
63) What is ethical relativism?
64) Give an account the social responsibility of businesses and list out its four main theories.
65) What is theory of moral minimum in social responsibility for businesses?
66) Under the moral theory of ________, a person looks to an outside source for ethical rules or
commands.
67) The ________ Statute is a federal statute that permits private parties to sue companies for
fraud on behalf of the government and share in any monetary recovery.
68) ________ is a moral theory with origins in the works of Jeremy Bentham and John Stuart.
69) The moral theory that dictates people choose the action or follow the rule that provides the
greatest good to society is referred to as ________.
70) ________ is one of the two principles of Kantian ethics that states that the actor must abide
by the rule he or she uses to judge the morality of someone else’s conduct.
71) Kantian ethics is also referred to as ________ ethics.
72) According to Rawl’s social justice theory, ________ is considered the essence of justice.
73) Rawl’s social justice theory is based on the ________ theory of morality proposed by John
Locke and Jean-Jacques Rousseau.
74) Under the moral theory of ________, if a person meets his or her own moral standard in
making a decision, no one can criticize him or her for it.
75) The social responsibility theories of businesses attempt to infuse a code of ________ in
corporate behavior and its responsibilities.
76) The ________ theory of social responsibility compels corporations to correct social injuries
it causes.
77) The legislative and judicial branches of government have established laws that enforce the
________ of social responsibility on corporations.
78) Section 406 of the ________ Act requires a public company to disclose whether it has
adopted a code of ethics for senior financial officers.
79) The social responsibility theory of ________ tries to protect the interest of people, besides
shareholders, who are connected to a corporation.
80) The social responsibility theory of ________ instructs corporations to solve social issues,
even ones that it may have not caused.