Chapter 3 1 Behaviour that conforms to individual beliefs and

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

Chapter 03: Conducting Business Ethically and Responsibly

1. Ethics are

a. standards or moral values regarding what is right and wrong.

b. avoiding doing things that, if everyone did them, would result in a real mess.

c. believing what’s right for one person is wrong for another.

d. the command to love one another.

e. standards as to how we treat one another.

Difficulty: 1 Page-Reference: 74

Question ID: 03-1-01 Skill: Knowledge

Objective: 3.1

2. Behaviour that individual beliefs and social norms define as being wrong and bad is called

a. ethical behaviour.

b. business ethics.

c. unethical behaviour.

d. price gouging.

e. motivation.

Difficulty: 1 Page-Reference: 74

Question ID: 03-1-02 Skill: Knowledge

Objective: 3.1

3. Behaviour that conforms to individual beliefs and social norms about what is right and good is

referred to as

a. social reaction behaviour.

b. ethical behaviour.

c. generally accepted behaviour.

d. collusional behaviour.

e. motivational behaviour.

Difficulty: 1 Page-Reference: 74

Question ID: 03-1-03 Skill: Knowledge

Objective: 3.1

4. ________ refers to ethical or unethical behaviours by a manager or employee of an organization.

a. Social ethics

b. Social responsibility

c. Business ethics

d. Collusion

e. Cartelling

Difficulty: 2 Page-Reference: 74

Question ID: 03-1-04 Skill: Knowledge

Objective: 3.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

5. The practice of jeitinho is sometimes evident in business activity in which country?

a. Canada

b. Japan

c. Indonesia

d. Brazil

e. The Czech Republic

Difficulty: 1 Page-Reference: 75

Question ID: 03-1-05 Skill: Knowledge

Objective: 3.1

6. The Personal Information Protection and Electronic Documents Act (PIPEDA)

a. is designed to protect electronic documents from computer hackers.

b. requires organizations to obtain consent before they collect, use, or disclose information about

individuals.

c. has been declared unconstitutional.

d. prohibits organizations from using personal information about their employees.

e. applies almost exclusively to universities.

Difficulty: 1 Page-Reference: 77

Question ID: 03-1-06 Skill: Comprehension

Objective: 3.1

7. Marlene is a shoe buyer for a large department store. Six months ago she accepted a free trip to

Barbados from one of the companies that she buys shoes from. Now, the company is strongly hinting that

it wants Marlene to increase the size of her next order, and Marlene feels some obligation to do so

because of the free trip she received. Marlene is involved in

a. illegal behaviour.

b. a conflict of interest.

c. collusion.

d. insider trading.

e. price gouging.

Difficulty: 1 Page-Reference: 77

Question ID: 03-1-07 Skill: Application

Objective: 3.1

8. Which of the following statements is correct with regard to the conflict of interest idea in business?

a. Conflicts of interest exist only in peoples‘ minds.

b. A conflict of interest occurs when an activity benefits an individual at the expense of the employer.

c. A conflict of interest occurs when employees of equal rank have a disagreement.

d. A conflict of interest occurs when a boss and a subordinate have a disagreement.

e. All of the statements are correct.

Difficulty: 2 Page-Reference: 77

Question ID: 03-1-08 Skill: Comprehension

Objective: 3.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

9. Air Canada sued WestJet, claiming that WestJet had accessed an Air Canada website that

contained confidential information. What was the outcome of the lawsuit?

a. The court ruled that there was nothing unethical about a person from WestJet accessing the

website if they could figure out how to do it.

b. WestJet admitted it had behaved in an unethical fashion and paid Air Canada $5 million dollars.

c. Air Canada was able to show that it had lost a lot of business because of the incident, and WestJet had

to reimburse Air Canada for the lost business.

d. The court declined to rule on the case.

e. The court ruled that this was merely a competitive squabble between two companies, and that no fine

would be imposed.

Difficulty: 2 Page-Reference: 78

Question ID: 03-1-09 Skill: Knowledge

Objective: 3.1

10. Which of the following behaviours is likely to be considered unethical?

a. Company executives encourage employees to invest in company stock while withholding

information about financial problems.

b. A manager hires a friend rather than a more qualified applicant.

c. An employee accepts a gift from a supplier in return for a large order.

d. A manager underpays an employee, knowing that the employee can’t afford to quit.

e. All of these situations would likely be considered unethical.

Difficulty: 2 Page-Reference: 75–79

Question ID: 03-1-10 Skill: Application

Objective: 3.1

11. Which of the following behaviours is illegal?

a. Company executives encourage employees to invest in company stock while withholding

information about financial problems.

b. An employee accepts a gift from a supplier in return for a large order.

c. A manager refuses to hire or promote a qualified visible minority, in spite of company policy

requiring this.

d. A manager underpays an employee, knowing that the employee can’t afford to quit.

e. All of these actions are illegal.

Difficulty: 3 Page-Reference: 75–79

Question ID: 03-1-11 Skill: Comprehension

Objective: 3.1

12. What is the difference between illegal behaviour and unethical behaviour?

a. What is illegal varies from country to country, but what is unethical does not.

b. Illegal behaviour is that which breaks a country‘s laws, but unethical behaviour may not break any

laws.

c. It is not possible to say what the difference is between illegal and unethical behaviour.

d. Illegal behaviour covers a broader range of issues than unethical behaviour.

e. There is no real difference between illegal and unethical behaviour.

Difficulty: 3 Page-Reference: 75–79

Question ID: 03-1-12 Skill: Application

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

Objective: 3.1

13. Ethical behaviour is determined

a. by the individual.

b. by the government.

c. partly by the individual and partly by the government.

d. partly by the individual and partly by the culture.

e. by the culture.

Difficulty: 2 Page-Reference: 76

Question ID: 03-1-13 Skill: Comprehension

Objective: 3.1

14. Jennifer is about to start her first job. Which of the following is least likely to be an influence on

her ethics and behaviour?

a. Her past experiences

b. The code of ethics in that firm

c. Her family and friends

d. Her peers at school

e. Religious teaching she may have received

Difficulty: 2 Page-Reference: 76

Question ID: 03-1-14 Skill: Application

Objective: 3.1

15. Many times individuals face situations that may compromise their ethical positions. How should a

person cope with situational factors for which there are ethical conflicts?

a. Develop a personal set of ethical codes of conduct regarding what is right and what is wrong.

b. Use the “golden rule.”

c. Don’t do anything.

d. Do what makes everyone else happy in the situation.

e. Act in the same manner as the individual has observed other people acting in similar situations.

Difficulty: 2 Page-Reference: 76

Question ID: 03-1-15 Skill: Application

Objective: 3.1

16. The first step in the simplified three-step model for applying ethical judgments to situations that

may arise during the course of business activities is to

a. determine the norms that relate to the situation.

b. determine the most appropriate moral values.

c. determine the implications of breaching the activity or policy.

d. gather the relevant factual information.

e. make an ethical judgment based on the rightness or wrongness of the proposed activity or policy.

Difficulty: 1 Page-Reference: 78

Question ID: 03-1-16 Skill: Comprehension

Objective: 3.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

17. When evaluating a decision based on the ethical norm of rights, a manager will consider which of

the following questions?

a. Does the decision optimize the satisfaction of all constituencies?

b. Is the decision consistent with what we regard as fair?

c. Does the decision respect the rights of the individuals involved?

d. Is the decision consistent with people’s responsibilities to each other?

e. How much will the decision cost if it is wrong?

Difficulty: 2 Page-Reference: 78

Question ID: 03-1-17 Skill: Comprehension

Objective: 3.1

18. When evaluating a decision based on the ethical norm of utility, a manager will consider which of

the following questions?

a. Does the decision optimize the satisfaction of all constituencies?

b. Is the decision consistent with what we regard as fair?

c. Does the decision respect the rights of the individuals involved?

d. Is the decision consistent with people’s responsibilities to each other?

e. How much will the decision cost if it is wrong?

Difficulty: 2 Page-Reference: 78

Question ID: 03-1-18 Skill: Comprehension

Objective: 3.1

19. When evaluating a decision based on the ethical norm of justice, a manager will consider which of

the following questions?

a. Does the decision optimize the satisfaction of all constituencies?

b. Is the decision consistent with what we regard as fair?

c. Does the decision respect the rights of the individuals involved?

d. Is the decision consistent with people’s responsibilities to each other?

e. How much will the decision cost if it is wrong?

Difficulty: 2 Page-Reference: 78

Question ID: 03-1-19 Skill: Comprehension

Objective: 3.1

20. When evaluating a decision based on the ethical norm of caring, a manager will consider which of

the following questions?

a. Does the decision optimize the satisfaction of all constituencies?

b. Is the decision consistent with what we regard as fair?

c. Does the decision respect the rights of the individuals involved?

d. Is the decision consistent with people’s responsibilities to each other?

e. How much will the decision cost if it is wrong?

Difficulty: 2 Page-Reference: 78

Question ID: 03-1-20 Skill: Comprehension

Objective: 3.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

21. The second step in the simplified three-step model for applying ethical judgments to situations

that may arise during the course of business activities is to

a. gather the relevant factual information.

b. determine the implications of breaching the activity or policy.

c. determine the most appropriate moral values.

d. make an ethical judgment based on the rightness or wrongness of the proposed activity or policy.

e. determine how much the decision will cost if it is wrong.

Difficulty: 1 Page-Reference: 78

Question ID: 03-1-21 Skill: Knowledge

Objective: 3.1

22. The final step in the simplified three-step model for applying ethical judgments to situations that

may arise during the course of business activities is to

a. determine the norms that relate to the situation.

b. determine the implications of breaching the activity or policy.

c. determine the most appropriate moral values.

d. gather the relevant factual information.

e. make an ethical judgment based on the rightness or wrongness of the proposed activity or policy.

Difficulty: 1 Page-Reference: 78

Question ID: 03-1-22 Skill: Knowledge

Objective: 3.1

23. John is a human resources manager who wants to establish an ethical policy for his company.

You tell him that the best support for ethical behaviour by a business organization is

a. the intention to behave ethically.

b. top-level management directives.

c. top-level management support.

d. codes of conduct.

e. social audits.

Difficulty: 2 Page-Reference: 80

Question ID: 03-1-23 Skill: Application

Objective: 3.1

24. Peter, the president of a small company, wants his employees to be aware that they should act

ethically. Which of the following has proven to be an effective method of improving ethical behaviour in a

business firm?

a. Reward managers who have secured an advantage for the firm, even if their behaviour might be

seen by some people as unethical.

b. Demonstrate top management commitment to high ethical standards.

c. Do not publicly bring attention to unethical behaviour, but deal with it privately.

d. Fire all unethical employees.

e. Do nothing to reinforce the undesirable behaviour so that it will not be repeated.

Difficulty: 2 Page-Reference: 80

Question ID: 03-1-24 Skill: Application

Objective: 3.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

25. Georgia wants to make sure that her employees behave in a highly ethical fashion. What should

Georgia avoid doing?

a. Empahsizing the importance of ethics to all employees

b. Helping employees to follow the company’s ethical standards

c. Modelling behaviour that employees should adopt

d. Relying on managers to report ethics violations

e. Ensuring that a strict code of ethics is in place

Difficulty: 2 Page-Reference: 80

Question ID: 03-1-25 Skill: Application

Objective: 3.1

26. What is the difference between “ethics” and “business ethics”?

a. The former refers to beliefs about what is right and wrong, while the latter doesn’t deal with right

and wrong, but deals only with economic issues.

b. The former refers to a restricted range of acceptable behaviours, while the latter refers to a much

broader range of acceptable behaviours.

c. There are no differences between the two.

d. The former refers to beliefs about what is right or wrong, while the latter refers to behaviours by

managers or employees.

e. None of the statements are accurate.

Difficulty: 2 Page-Reference: 74

Question ID: 03-1-26 Skill: Comprehension

Objective: 3.1

27. Mary is a purchasing agent who has been offered a gift by a supplier if she will order products

from them for her company. Mary is facing a

a. price gouging situation.

b. conflict of interest.

c. social responsibility situation.

d. utility norm.

e. none of these.

Difficulty: 1 Page-Reference: 77

Question ID: 03-1-27 Skill: Comprehension

Objective: 3.1

28. If a politician sits on a board that grants money to companies, and that executive owns a

company that is applying for a grant from the board, he or she is most likely facing a(n)

a. ethical dilemma.

b. utility norm.

c. illegal situation.

d. conflict of interest.

e. justice norm.

Difficulty: 1 Page-Reference: 77

Question ID: 03-1-28 Skill: Comprehension

Objective: 3.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

29. If a politician rents an office from his sister at twice the going rate with taxpayers’ money, he is

most likely facing a(n)

a. ethical dilemma.

b. utility norm.

c. illegal situation.

d. conflict of interest.

e. justice norm.

Difficulty: 1 Page-Reference: 77

Question ID: 03-1-29 Skill: Comprehension

Objective: 3.1

30. Sam is applying a three-step model to help him decide whether a particular business decision is

ethical or unethical. What is the first step?

a. Reflect on his own ethical standards as background for the decision.

b. Gather the relevant factual information.

c. Consult with his boss about the situation.

d. Make an ethical judgment about the rightness or wrongness of the situation.

e. Determine the most appropriate moral values.

Difficulty: 2 Page-Reference: 78

Question ID: 03-1-30 Skill: Comprehension

Objective: 3.1

31. Marilyn has decided to use the three-step model discussed in the text to decide whether a

business decision she is contemplating is ethical or unethical. What is the third step in the process?

a. Reflect on her own ethical standards as background for the decision.

b. Gather the relevant factual information.

c. Consult with her boss about the situation.

d. Make an ethical judgment about the rightness or wrongness of the situation.

e. Determine the most appropriate moral values.

Difficulty: 2 Page-Reference: 78

Question ID: 03-1-31 Skill: Comprehension

Objective: 3.1

32. When a Canadian company is operating in a country where bribes are legal, the Canadian

government expects the company to

a. use their judgment, since Canadian laws are not applicable.

b. not pay any bribes at all.

c. notify Canadian authorities that they may have to pay a bribe in order to do business in the foreign

country.

d. match the bribes that other competitive firms are paying so they can get the business.

e. none of the statements are accurate.

Difficulty: 2 Page-Reference: 78

Question ID: 03-1-32 Skill: Application

Objective: 3.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

33. After a hurricane hit Halifax a few years ago, local retailers increased the price of milk and gas by

50% in one day, even though all other stores in the province did not increase prices. These retailers were

using

a. conflict-of-interest pricing.

b. sharp business practices.

c. crisis-based pricing.

d. price gouging.

e. it is not possible to tell from the information that is given.

Difficulty: 2 Page-Reference: 78

Question ID: 03-1-33 Skill: Comprehension

Objective: 3.1

34. To show the company’s desire for ethical behaviour by its employees, many business firms have

established

a. an ethical review board.

b. an office of ethical affairs.

c. a whistleblower reward system.

d. random ethical audits.

e. codes of ethics.

Difficulty: 1 Page-Reference: 80

Question ID: 03-1-34 Skill: Knowledge

Objective: 3.1

35. While on a business trip, a manager takes some friends to dinner for a social evening and then

charges the dinner to his company’s expense account. The ethical ________norm would ask “Does this

optimize the satisfaction of all constituencies?” while the ethical ______ norm would ask “Is this fair?”

a. utility; justice

b. rights; caring

c. justice; utility

d. caring; reciprocity

e. reciprocity; caring

Difficulty: 2 Page-Reference: 78

Question ID: 03-1-35 Skill: Application

Objective: 3.1

36. All of the following are functions of codes of ethics except

a. they increase public confidence in a firm or its industry.

b. they ensure that unethical behaviour will not occur in the firm.

c. they may help stem the tide of government regulation.

d. they improve internal operations by providing consistent ethical standards.

e. they help management respond to problems that arise as a result of unethical behaviour.

Difficulty: 1 Page-Reference: 80

Question ID: 03-1-36 Skill: Comprehension

Objective: 3.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

37. Approximately ____ of Canadian firms have codes of ethics, while approximately _______ of U.S.

firms have them.

a. one-third; two-thirds

b. two-thirds; nine-tenths

c. one-fifth; one-fourth

d. one-half; one-half

e. one-half; three-quarters

Difficulty: 3 Page-Reference: 81

Question ID: 03-1-37 Skill: Knowledge

Objective: 3.1

38. John wants his employees to be aware that they should act ethically. He should

a. fire anyone who behaves unethically.

b. not draw public attention to any employee’s unethical behaviour, but instead deal with it privately.

c. publicly reward ethical behaviour and ignore unethical behaviour.

d. publicly discipline employees who behave unethically, but not fire them.

e. adopt a written code of ethics.

Difficulty: 2 Page-Reference: 80

Question ID: 03-1-38 Skill: Application

Objective: 3.1

39. As a buyer for your company, you direct large sums of money to some suppliers when you make

purchases of raw materials from them. One day, you receive an unsolicited $1000 cheque in the mail

from one of the suppliers. The accompanying note says that you can use the money to buy some toys for

your children. You consult your company‘s code of ethics and notice that employees are not allowed to

accept gifts from suppliers for their own personal use. But the policy doesn’t say anything gifts for family

members, so you decide to use the card. Which of the following would support your decision?

a. The gift card has no expiration date, so you can wait to use it later, when you are no longer in

your current position.

b. The cheque was received at your home, not at work.

c. As it happens, you have just spent some money on gifts for your children, so you have no

immediate need to use the card.

d. The president of the supplier in question is your father–in-law, so the gift is a personal gift for his

grandchildren.

e. On checking, you discover that the supplier sent gift cards of lower value to other salespersons in

his company.

Difficulty: 2 Page-Reference: 78–81

Question ID: 03-1-39 Skill: Analysis

Objective: 3.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

40. As a buyer for your company, you direct large sums of money to some suppliers when you make

purchases of raw materials from them. One day, you receive an unsolicited $1000 cheque in the mail

from one of the suppliers. The accompanying note says that you can use the money to buy some toys for

your children. You consult your company’s code of ethics and notice that employees are not allowed to

accept gifts from suppliers for their own personal use. But the policy doesn’t say anything gifts for family

members, so you decide to use the card. Which of the following would not support your decision?

a. The supplier provides low prices that have helped your company be competitive in the market.

b. The supplier badly needs your purchasing contracts in order to avoid bankruptcy.

c. You do not have the final say about which bids from suppliers will be accepted.

d. Your work contract clearly states that you must report all gifts that come from people who work for

companies that you do business with.

e. There are rumours circulating that other employees also received an unsolicited cheque from the

supplier.

Difficulty: 2 Page-Reference: 78–81

Question ID: 03-1-40 Skill: Analysis

Objective: 3.1

41. Suppose that a sales manager decides to give the same bonus to Georgia (who has a better-

than-average sales record) and to Mark (who has only an average record). Mark is known to be extremely

honest, while rumours have been heard that Georgia sometimes makes deals that look a bit dishonest

(but a formal review of one of her deals was judged to be in compliance with the letter of the company’s

code of ethics). Which of the following would support the sales manager’s decision?

a. The employees had received and duly signed a statement agreeing to uphold the company’s

code of ethics.

b. Workers who were passing the rumours around had been guilty of ethical breaches.

c. A recently conducted social audit revealed concerns about the firm’s tolerance of unethical

practices by sales personnel and how that behaviour had impacted workplace morale.

d. The company‘s code of ethics clearly indicates what separates a responsible business transaction

from one that involves dishonesty.

e. The sales manager’s department had a major positive impact on improving the firm’s profitability

during the last quarter.

Difficulty: 2 Page-Reference: 78–81

Question ID: 03-1-41 Skill: Analysis

Objective: 3.1

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

42. Suppose that a sales manager decides to give the same bonus to Georgia (who has a better–

than-average sales record) and to Mark (who has only an average record). Mark is known to be extremely

honest, while rumours have been heard that Georgia sometimes makes deals that look a bit dishonest

(but a formal review of one of her deals was judged to be in compliance with the letter of the company‘s

code of ethics). Which of the following supports the argument that Georgia should get a larger bonus than

Mark?

a. Georgia observes that the market is very competitive and sales people have to act in their own

self-interest.

b. The company has a policy of tying bonuses strictly to sales records in order to ensure fairness to all

sales personnel.

c. The sales staff has just been through a two-day training seminar which emphasized the importance

of ethical behaviour in sales activities.

d. Some managers dismissed the rumours against Georgia because they felt they were based simply

on jealousy of her great sales record.

e. If a larger bonus is given to Georgia, other sales people would notice and this would give them an

incentive to work harder.

Difficulty: 2 Page-Reference: 78–81

Question ID: 03-1-42 Skill: Analysis

Objective: 3.1

43. ________is the view that a company’s only social responsibility is to make as much money as

possible for its shareholders.

a. Free market capitalism

b. Managerial capitalism

c. Globalization

d. Mixed economy capitalism

e. None of these terms are correct

Difficulty: 1 Page-Reference: 83

Question ID: 03-1-43 Skill: Knowledge

Objective: 3.2

44. The view that business should balance its commitments to the stakeholders in its environment is

known as

a. managerial capitalism.

b. social auditing.

c. social responsibility.

d. business ethics.

e. stakeholder theory.

Difficulty: 2 Page-Reference: 81

Question ID: 03-1-44 Skill: Knowledge

Objective: 3.2

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

45. Social Return on Investment (SROI) helps companies to

a. improve their financial return on investment.

b. increase employee satisfaction.

c. understand, manage, and communicate the social value of their activities for stakeholders.

d. respond to required government regulations on social responsibility.

e. improve the level of ethics within the company.

Difficulty: 2 Page-Reference: 82

Question ID: 03-1-45 Skill: Comprehension

Objective: 3.2

46. Why did the fair trade movement develop?

a. Because large industrialized countries were using unfair trading practices with developing

countries

b. Because pollution was increasing too rapidly in developing countries as a result of excessive

investment in mining operations

c. Because workers involved in producing commodities like coffee were not receiving fair payment for

their products

d. Because free trade agreements were hurting smaller producers

e. Because there was a surplus of cotton as a result of highly efficient U.S. production

Difficulty: 2 Page-Reference: 83

Question ID: 03-1-46 Skill: Comprehension

Objective: 3.2

47. Ian is the president of a medium-sized manufacturing company. He wants to ensure that his

company behaves in a socially responsible way. Which of the following is the greatest challenge facing

Ian?

a. Determining how to respond to the interests of one part of society which conflicts with the needs

of another part of society

b. Determining the contents of the code of ethics and what takes priority

c. Determining when to conduct a social audit

d. Knowing what social responsibility is

e. Determining when to conduct ethical training for employees

Difficulty: 3 Page-Reference: 81–83

Question ID: 03-1-47 Skill: Comprehension

Objective: 3.2

48. Which of the following has the biggest influence on the social responsibility of a business firm?

a. Government legislation

b. Ethical values of the top-level management

c. Interests of the investors

d. Ethical values of the employees

e. Demands by society

Difficulty: 1 Page-Reference: 81–83

Question ID: 03-1-48 Skill: Knowledge

Objective: 3.2

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

49. Organizational stakeholders can best be defined as

a. competitors.

b. individuals and businesses that own shares in a company.

c. government regulators who oversee an industry.

d. the officers and key employees of an organization.

e. individuals and groups that are directly affected by the practices of an organization.

Difficulty: 2 Page-Reference: 81

Question ID: 03-1-49 Skill: Knowledge

Objective: 3.2

50. Which of the following is correct regarding global warming?

a. The idea is a hoax.

b. Global warming is occurring, but the rate is so slow that it will be hundreds of years before any

significant problems arise.

c. There is agreement that global warming is caused by increased air pollution that is a result of

human activity.

d. There is agreement that global warming is happening, but there is a debate about whether the

warming is natural or caused by human activity.

e. Global warming will have a negative effect on everyone.

Difficulty: 3 Page-Reference: 85

Question ID: 03-1-50 Skill: Comprehension

Objective: 3.3

51. With regard to the “cap and trade” system for trading carbon credits, it is correct to say that

a. very little fraud has been uncovered in the system.

b. the system has proven to be very effective.

c. studies show that countries in Asia are not interested in the system.

d. companies in developing countries buy credits which they sell to companies in industrialized

countries.

e. carbon credits essentially give companies the right to pollute the environment.

Difficulty: 3 Page-Reference: 84

Question ID: 03-1-51 Skill: Comprehension

Objective: 3.3

52. Ensyn Corp. converts sawdust into liquid fuel by blasting wood waste with a sand-like substance

that is heated. This use of plant waste to produce energy is known as

a. recycling.

b. biomass.

c. green power.

d. toxic waste conversion.

e. exajoules.

Difficulty: 2 Page-Reference: 86

Question ID: 03-1-52 Skill: Knowledge

Objective: 3.3

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

53. Sussex Co. is developing a policy so it will be more environmentally responsible. A problem that it

will face will be

a. dealing with various environmental organizations that have different views on environmental

issues.

b. in some cases dealing with the pressure to discontinue manufacturing profitable, but hazardous,

products.

c. the difficulty in getting government, business, environmentalists, and suppliers to agree on what

actions are environmentally responsible.

d. the costs of being more environmentally responsible.

e. all of these issues.

Difficulty: 3 Page-Reference: 83–87

Question ID: 03-1-53 Skill: Application

Objective: 3.3

54. Dangerous chemical and/or radioactive byproducts of manufacturing processes are known as

a. hazardous residue.

b. recycled contaminants.

c. fast food.

d. toxic wastes.

e. non-treated sludge.

Difficulty: 1 Page-Reference: 86

Question ID: 03-1-54 Skill: Knowledge

Objective: 3.3

55. Under the Canadian and Ontario Environmental Protection Act, liability for a business firm can run

as high as ________ per day.

a. $10 000

b. $500 000

c. $25 000

d. $2 000 000

e. $5 000 000

Difficulty: 2 Page-Reference: 86

Question ID: 03-1-55 Skill: Knowledge

Objective: 3.3

56. ________ are gases that trap heat in the atmosphere.

a. Greenhouse emissions

b. Byproducts

c. Energy supplies

d. Acid rain

e. Exajoules

Difficulty: 2 Page-Reference: 105

Question ID: 03-1-56 Skill: Knowledge

Objective: 3.3

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

57. Which three countries are the worst greenhouse gas emitters per capita?

a. China, India, and Russia

b. the United States, Canada, and Australia

c. China, Russia, and the Australia

d. China, the United States, and Canada

e. Japan, China, and Russia

Difficulty: 3 Page-Reference: 83

Question ID: 03-1-57 Skill: Knowledge

Objective: 3.3

58. What are carbon credits?

a. Credits given to countries that produce more oil than they consume

b. Credits given to countries that install the most pollution equipment per capita

c. Credits that are purchased by countries that give them the right to pollute the atmosphere

d. Credits that are purchased by countries after they have been found guilty of polluting the

atmosphere

e. Credits that are given to countries for producing the carbon that is needed to make oil

Difficulty: 3 Page-Reference: 84

Question ID: 03-1-58 Skill: Comprehension

Objective: 3.3

59. A poll of 12 000 people in 11 different countries revealed that ________ percent of those polled

were willing to spend extra money to fight climate change.

a. 90

b. 75

c. 65

d. 45

e. 20

Difficulty: 3 Page-Reference: 85

Question ID: 03-1-59 Skill: Knowledge

Objective: 3.3

60. Which term refers to the conversion of waste materials into useful products?

a. Recycling

b. Solid waste recovery

c. Acid rain

d. Biomass

e. Toxic waste disposal

Difficulty: 2 Page-Reference: 86

Question ID: 03-1-60 Skill: Knowledge

Objective: 3.3

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

61. Dangerous chemical and/or radioactive byproducts of various manufacturing processes are called

_____.

a. solid waste

b. acid rain

c. toxic waste

d. incineration waste

e. biomass

Difficulty: 1 Page-Reference: 86

Question ID: 03-1-61 Skill: Knowledge

Objective: 3.3

62. Governments and businesses have to face the problem of dealing with toxic material. What is the

biggest land pollution problem they face in dealing with toxic materials?

a. Special safety equipment must be used for handling hazardous materials

b. Vehicles which transport toxic materials must be clearly marked

c. Toxic material usually cannot be processed into a harmless material or destroyed

d. Toxic waste cannot be stored and must be destroyed

e. Employees require special training in handling toxic materials

Difficulty: 2 Page-Reference: 86

Question ID: 03-1-62 Skill: Application

Objective: 3.3

63. Consumerism is

a. the group of laws dealing with retail commercial transactions.

b. the movement that seeks to protect and expand the rights of consumers in their dealings with

businesses.

c. the right to be informed about all aspects of a product.

d. the right to choose the product.

e. the right to safe products.

Difficulty: 2 Page-Reference: 87

Question ID: 03-1-63 Skill: Knowledge

Objective: 3.3

64. Which of the following illustrates consumers’ rights to safe products?

a. Clothing must be labelled with information about its proper care.

b. A new vacuum cleaner must be free of electrical hazards to use in cleaning a consumer’s home.

c. Open competition must exist in the marketplace.

d. Procter & Gamble provides a toll-free telephone number for consumers to use for complaints or

questions.

e. Food products must list their ingredients.

Difficulty: 2 Page-Reference: 87

Question ID: 03-1-64 Skill: Comprehension

Objective: 3.3

65. When Exeter Corp., a food company, lists the ingredients that make up their products, which

consumer right is the company addressing?

a. Right to choose

b. Right to safe products

c. Right to courteous service

d. Right to be informed

e. Right to be heard

Difficulty: 2 Page-Reference: 87

Question ID: 03-1-65 Skill: Comprehension

Objective: 3.3

66. Social activism dedicated to protecting the rights of consumers in their dealings with businesses is

called

a. whistle-blowing.

b. kiting.

c. price gouging.

d. consumerism.

e. collusion.

Difficulty: 1 Page-Reference: 87

Question ID: 03-1-66 Skill: Knowledge

Objective: 3.3

67. Responding to increased demand with steep and unwarranted price increases is called

a. unit pricing.

b. demand pricing.

c. price fixing.

d. price gouging.

e. price leadership.

Difficulty: 1 Page-Reference: 78

Question ID: 03-1-67 Skill: Knowledge

Objective: 3.3

68. Arctic Glacier Inc., a Canadian company, was one of several companies served with subpoenas

by the U.S. government as it investigated possible _________.

a. violation of monopoly rules

b. insider trading

c. cheque kiting

d. unsafe products

e. collusion

Difficulty: 2 Page-Reference: 88

Question ID: 03-1-68 Skill: Knowledge

Objective: 3.3

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

69. Which consumer right is violated by a company that restricts and interferes with competition?

a. Right to be heard

b. Right to choose what they buy

c. Right to good prices

d. Right to safe products

e. Right to be informed

Difficulty: 2 Page-Reference: 87

Question ID: 03-1-69 Skill: Comprehension

Objective: 3.3

70. Atlas Corp. offers a money-back guarantee on products and provides a complaint hotline for its

customers. This is an example of which of the following consumer rights?

a. Right to be informed

b. Right to choose

c. Right to be heard

d. Right to health and safety

e. Right to low prices

Difficulty: 1 Page-Reference: 87

Question ID: 03-1-70 Skill: Comprehension

Objective: 3.3

71. The recent surge of products being called “light” led to an investigation by government agencies.

This illustrates concerns about which of the basic consumer rights?

a. Right to good prices

b. Right to choose what they buy

c. Right to safe products

d. Right to be informed

e. Right to be heard

Difficulty: 2 Page-Reference: 87

Question ID: 03-1-71 Skill: Comprehension

Objective: 3.3

72. Because it was the initial year of production, only 3000 units of a new model car were built. Some

auto dealers got together and agreed that they would sell the cars only if the customer was willing to pay

several thousand dollars over the sticker price. This is an example of

a. price gouging.

b. smart business practice.

c. price fixing.

d. collusion.

e. price lining.

Difficulty: 2 Page-Reference: 88

Question ID: 03-1-72 Skill: Comprehension

Objective: 3.3

Business, Eighth Canadian Edition Griffin, Ebert, Starke, Dracopoulos, Lang

Chapter 3—Conducting Business Ethically and Responsibly

73. Which of the following illustrates consumers’ rights to safe products?

a. Food products must list their ingredients.

b. Open competition must exist in the marketplace.

c. A new vacuum cleaner must be free of electrical hazards.

d. Procter & Gamble provides a toll-free telephone number for consumers to use for complaints or

questions.

e. Clothing must be labelled with information about its proper care.

Difficulty: 2 Page-Reference: 87

Question ID: 03-1-73 Skill: Comprehension

Objective: 3.3

74. Several local video rental stores got together and agreed on what to charge customers for various

rentals. This is a case of

a. good business practices.

b. the right to be informed.

c. collusion.

d. price lining.

e. price gouging.

Difficulty: 2 Page-Reference: 88

Question ID: 03-1-74 Skill: Comprehension

Objective: 3.3

75. By adding labels warning of flammability and instructions on how to use the contents on spray

cans, which consumer right is being met?

a. Right to be informed

b. Right to safe products

c. Right to be heard

d. Right to choose

e. No consumer right is being satisfied

Difficulty: 2 Page-Reference: 87

Question ID: 03-1-75 Skill: Comprehension

Objective: 3.3

76. When Procter & Gamble puts a toll-free number on its products so that consumers can call if they

have questions or complaints, this is an example of

a. the right to choose.

b. the right to be informed.

c. the right to health and safety.

d. the right to be heard.

e. the right to everyday low prices.

Difficulty: 2 Page-Reference: 87

Question ID: 03-1-76 Skill: Comprehension

Objective: 3.3