Thursday, September 26, 2019

Business Essentials Canadian 8th Edition Ebert Test Bank

Business Essentials Canadian 8th Edition Ebert Test Bank



Description
Test Bank For Business Essentials Canadian 8th Edition Ebert

Sample Chapter Below:
Chapter 3   Conducting Business Ethically and Responsibly

3.1   Multiple-Choice Questions

1) The term “ethics” refers to
  1. A) standards or moral values regarding what is right and wrong.
  2. B) avoiding doing things that, if everyone did it, we would have a real mess.
  3. C) believing what’s right for one person is wrong for another.
  4. D) conflicts of interest that develop between two co-workers.
  5. E) bad behaviour by top managers in a company.
Answer:  A
Diff: 1     Type: MC     Page Ref: 47
Skill:  Knowledge
Objective:  3.1

2) What is the difference between “ethics” and “business ethics”?
  1. A) The former refers to beliefs about what is right and wrong, while the latter doesn’t deal with right and wrong, only with economic issues.
  2. B) The former refers to a restricted range of acceptable behaviours, while the latter refers to a much broader range of acceptable behaviours.
  3. C) There are no differences between the two terms.
  4. D) The former refers to beliefs about what is right or wrong, while the latter refers to behaviours by managers or employees.
  5. E) The former refers to the actions of government employees, while the latter refers to the actions of employees in private-sector firms.
Answer:  D
Diff: 2     Type: MC     Page Ref: 47
Skill:  Comprehension
Objective:  3.1

3) Behaviour that conforms to individual beliefs and social norms about what is right and good is referred to as
  1. A) social reaction behaviour.
  2. B) ethical behaviour.
  3. C) generally accepted behaviour.
  4. D) collusional behaviour.
  5. E) motivational behaviour.
Answer:  B
Diff: 1     Type: MC     Page Ref: 47
Skill:  Knowledge
Objective:  3.1

4) ________ refers to ethical or unethical behaviours by a manager or employee of an organization.
  1. A) Social ethics
  2. B) Social responsibility
  3. C) Business ethics
  4. D) Collusion
  5. E) Cartelling
Answer:  C
Diff: 2     Type: MC     Page Ref: 48
Skill:  Knowledge
Objective:  3.1

5) Ethical and unethical behaviour is determined partly by the ________ and partly by ________.
  1. A) society; culture
  2. B) society; values
  3. C) individual; culture
  4. D) person; religion
  5. E) culture; society
Answer:  C
Diff: 2     Type: MC     Page Ref: 48
Skill:  Knowledge
Objective:  3.1

6) With regard to the distinction between unethical and illegal behaviour, it is correct to say that
  1. A) something that is illegal is also unethical.
  2. B) a given act can be ethical, yet illegal.
  3. C) the distinction between unethical and illegal behaviour has no practical significance.
  4. D) it is impossible for something to be unethical and legal at the same time.
  5. E) all of these are correct.
Answer:  B
Diff: 2     Type: MC     Page Ref: 47
Skill:  Comprehension
Objective:  3.1

7) “Cooking the books” to make a company’s financial situation look better than it really is illustrates a behaviour that is
  1. A) ethical but illegal.
  2. B) ethical and illegal.
  3. C) unethical but legal.
  4. D) unethical and illegal.
  5. E) there is no consensus on how this behaviour should be classified.
Answer:  D
Diff: 2     Type: MC     Page Ref: 47
Skill:  Comprehension
Objective:  3.1

8) Breaking the law in a totalitarian regime in order to carry out humanitarian efforts would probably be seen by most people as
  1. A) ethical but illegal.
  2. B) ethical and illegal.
  3. C) unethical but legal.
  4. D) unethical and illegal.
  5. E) there is no consensus on how this behaviour should be classified.
Answer:  A
Diff: 2     Type: MC     Page Ref: 47
Skill:  Comprehension
Objective:  3.1

9) John is a salesperson who feels that he is not paid nearly enough money for the work that he does. He therefore “pads” his expense account in order to receive increased financial benefits. John’s behaviour would be seen as ethical according to which criterion?
  1. A) Rights
  2. B) Justice
  3. C) Utility
  4. D) Caring
  5. E) None of these
Answer:  E
Diff: 2     Type: MC     Page Ref: 49
Skill:  Comprehension
Objective:  3.1

10) The Personal Information Protection and Electronic Documents Act (PIPEDA)
  1. A) is designed to protect electronic documents from computer hackers.
  2. B) requires organizations to obtain consent before they collect, use, or disclose information about individuals.
  3. C) has been declared unconstitutional.
  4. D) prohibits organizations from using personal information about their employees.
  5. E) applies almost exclusively to universities.
Answer:  B
Diff: 1     Type: MC     Page Ref: 48
Skill:  Comprehension
Objective:  3.1


11) 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
  1. A) illegal behaviour.
  2. B) a conflict of interest.
  3. C) collusion.
  4. D) illegal and unethical behaviour.
  5. E) unethical behaviour.
Answer:  B
Diff: 1     Type: MC     Page Ref: 48
Skill:  Comprehension
Objective:  3.1
12) A manager who discriminates against any ethnic minority in hiring exhibits behaviour that is
  1. A) ethical but illegal.
  2. B) ethical and illegal.
  3. C) unethical but legal.
  4. D) unethical and illegal.
  5. E) there is no consensus on how this behaviour should be classified.
Answer:  D
Diff: 2     Type: MC     Page Ref: 47
Skill:  Comprehension
Objective:  3.1

13) The practice of jeitinho is an element of business activity in which country?
  1. A) Canada
  2. B) Japan
  3. C) Indonesia
  4. D) Brazil
  5. E) Czech Republic
Answer:  D
Diff: 1     Type: MC     Page Ref: 47
Skill:  Knowledge
Objective:  3.1


14) Which of the following statements is correct with regard to the conflict of interest idea in business?
  1. A) Conflicts of interest exist only in peoples’ minds.
  2. B) A conflict of interest occurs when an activity benefits an individual at the expense of the employer.
  3. C) A conflict of interest occurs when employees of equal rank have a disagreement.
  4. D) A conflict of interest occurs when a boss and a subordinate have a disagreement.
  5. E) All of the statements are correct.
Answer:  B
Diff: 2     Type: MC     Page Ref: 48
Skill:  Comprehension
Objective:  3.1

15) .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)
  1. A) ethical dilemma.
  2. B) utility norm.
  3. C) illegal situation.
  4. D) conflict of interest.
  5. E) justice norm.
Answer:  D
Diff: 1     Type: MC     Page Ref: 48
Skill:  Comprehension
Objective:  3.1
16) Air Canada sued WestJet, claiming that WestJet had accessed an Air Canada website which contained confidential information. What was the outcome of the lawsuit?
  1. 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.
  2. B) WestJet admitted it had behaved in an unethical fashion, paid Air Canada $5 million dollars, and gave $10 million to children’s charities.
  3. 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.
  4. D) The court declined to rule on the case.
  5. E) The court ruled that this was merely a competitive squabble between two companies and that no fine would be imposed.
Answer:  B
Diff: 2     Type: MC     Page Ref: 48
Skill:  Knowledge
Objective:  3.1


17) A 2014 survey of global managers found that an average of ________ percent of managers felt that corruption was widespread in their country.
  1. A) 10
  2. B) 30
  3. C) 40
  4. D) 60
  5. E) 70
Answer:  C
Diff: 2     Type: MC     Page Ref: 48
Skill:  Knowledge
Objective:  3.1

18) Which of the following behaviours is illegal?
  1. A) Company executives encourage employees to invest in company stock while withholding information about financial problems.
  2. B) An employee accepts a gift from a supplier in return for a large order.
  3. C) A manager refuses to hire or promote a qualified visible minority in spite of company policy.
  4. D) A manager underpays an employee, knowing that the employee can’t afford to quit.
  5. E) All of these actions are illegal.
Answer:  C
Diff: 3     Type: MC     Page Ref: 47
Skill:  Comprehension
Objective:  3.1

19) What is the difference between illegal behaviour and unethical behaviour?
  1. A) What is illegal varies from country to country, but what is unethical does not.
  2. B) Illegal behaviour is that which breaks a country’s laws, but unethical behaviour may not break any laws.
  3. C) It is not possible to say what the difference is between illegal and unethical behaviour.
  4. D) Illegal behaviour covers a broader range of issues than unethical behaviour.
  5. E) There is no real difference between illegal and unethical behaviour.
Answer:  B
Diff: 3     Type: MC     Page Ref: 47
Skill:  Comprehension
Objective:  3.1
20) Joe paid his subordinate John less than John deserved because Joe knew that John needed the job badly. Joe’s behaviour is
  1. A) illegal but not unethical.
  2. B) unethical but not illegal.
  3. C) both illegal and unethical.
  4. D) neither illegal nor unethical.
  5. E) It is not possible to say without determining how John feels about his pay.
Answer:  B
Diff: 3     Type: MC     Page Ref: 47
Skill:  Comprehension
Objective:  3.1

21) Jennifer is about to start her first job. Which of the following is least likely to be an influence on her ethics and behaviour?
  1. A) Her past experiences
  2. B) The code of ethics in that firm
  3. C) Her family and friends
  4. D) Her peers at school
  5. E) Religious teaching she may have received
Answer:  B
Diff: 2     Type: MC     Page Ref: 47
Skill:  Comprehension
Objective:  3.1

22) Georgia wants to make sure that her employees behave in a highly ethical fashion. What should she avoid doing?
  1. A) Emphasizing the importance of ethics to all employees
  2. B) Helping employees to follow the company’s ethical standards
  3. C) Modelling behaviour that employees should adopt
  4. D) Relying on managers to report ethics violations
  5. E) Ensuring that a strict code of ethics is in place
Answer:  D
Diff: 2     Type: MC     Page Ref: 50
Skill:  Application
Objective:  3.1

23) 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
  1. A) determine the norms that relate to the situation.
  2. B) determine the most appropriate moral values.
  3. C) determine the implications of breaching the activity or policy.
  4. D) gather the relevant factual information.
  5. E) make an ethical judgment based on the rightness or wrongness of the proposed activity or policy.
Answer:  D
Diff: 1     Type: MC     Page Ref: 49-50
Skill:  Comprehension
Objective:  3.1

24) 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?”
  1. A) utility
  2. B) rights
  3. C) justice
  4. D) caring
  5. E) reciprocity
Answer:  A
Diff: 2     Type: MC     Page Ref: 49
Skill:  Comprehension
Objective:  3.1

25) 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 ________ norm would ask “Is this fair”?
  1. A) utility
  2. B) rights
  3. C) justice
  4. D) caring
  5. E) reciprocity
Answer:  C
Diff: 2     Type: MC     Page Ref: 49
Skill:  Comprehension
Objective:  3.1

26) 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 ________ norm would ask “Is it consistent with people’s responsibilities to each other”?
  1. A) utility
  2. B) rights
  3. C) justice
  4. D) caring
  5. E) reciprocity
Answer:  D
Diff: 2     Type: MC     Page Ref: 49
Skill:  Comprehension
Objective:  3.1


27) Miranda has decided to evaluate a decision she has made on the basis of the ethical norm of rights. What questions should she ask?
  1. A) Does the decision optimize the satisfaction of all constituencies?
  2. B) Is the decision consistent with what we regard as fair?
  3. C) Does the decision respect the rights of the individuals involved?
  4. D) Is the decision consistent with people’s responsibilities to each other?
  5. E) How much will the decision cost if it is wrong?
Answer:  C
Diff: 2     Type: MC     Page Ref: 49
Skill:  Application
Objective:  3.1
28) Bernard has decided to evaluate a decision he has made based on the ethical norm of utility. What question should he ask?
  1. A) Does the decision optimize the satisfaction of all constituencies?
  2. B) Is the decision consistent with what we regard as fair?
  3. C) Does the decision respect the rights of the individuals involved?
  4. D) Is the decision consistent with people’s responsibilities to each other?
  5. E) How much will the decision cost if it is wrong?
Answer:  A
Diff: 2     Type: MC     Page Ref: 49
Skill:  Application
Objective:  3.1

29) Belinda has decided to evaluate a decision she has made on the basis of the ethical norm of justice. What question should she ask?
  1. A) Does the decision optimize the satisfaction of all constituencies?
  2. B) Is the decision consistent with what we regard as fair?
  3. C) Does the decision respect the rights of the individuals involved?
  4. D) Is the decision consistent with people’s responsibilities to each other?
  5. E) How much will the decision cost if it is wrong?
Answer:  B
Diff: 2     Type: MC     Page Ref: 49
Skill:  Application
Objective:  3.1

30) Barrie has decided to evaluate a decision he has made on the basis of the ethical norm of caring. Which of the following questions does he need to ask?
  1. A) Does the decision optimize the satisfaction of all constituencies?
  2. B) Is the decision consistent with what we regard as fair?
  3. C) Does the decision respect the rights of the individuals involved?
  4. D) Is the decision consistent with people’s responsibilities to each other?
  5. E) How much will the decision cost if it is wrong?
Answer:  D
Diff: 2     Type: MC     Page Ref: 49
Skill:  Application
Objective:  3.1

31) Sam has decided to apply the three-step model to help him decide whether a business decision he is thinking about making is ethical or unethical. What should he do first?
  1. A) Reflect on his own ethical standards as background for the decision
  2. B) Gather the relevant factual information
  3. C) Consult with his boss about the situation
  4. D) Make an ethical judgment about the rightness or wrongness of the situation
  5. E) Determine the most appropriate moral values
Answer:  B
Diff: 2     Type: MC     Page Ref: 49
Skill:  Application
Objective:  3.1
32) All things considered, what is generally the best ethical norm to use when a person is trying to determine whether a decision is ethical?
  1. A) Rights
  2. B) Caring
  3. C) Justice
  4. D) Utility
  5. E) None of these
Answer:  E
Diff: 2     Type: MC     Page Ref: 49
Skill:  Application
Objective:  3.1

33) Marilyn has decided to use the three-step model to decide whether a particular business decision is ethical or unethical. She has already gathered the relevant factual information about the situation. What should she do next?
  1. A) Reflect on her own ethical standards as background for the decision
  2. B) Gather the relevant factual information
  3. C) Consult with her boss about the situation
  4. D) Make an ethical judgment about the rightness or wrongness of the situation
  5. E) Determine the most appropriate moral values
Answer:  E
Diff: 2     Type: MC     Page Ref: 49
Skill:  Comprehension
Objective:  3.1


34) Peter, the president of a small company, wants his employees to be aware that they should act ethically. Which of the following has proven most effective in improving ethical behaviour in a business firm?
  1. A) Reward managers who have secured an advantage for the firm, even if their behaviour might be seen by some people as unethical
  2. B) Demonstrate top management commitment to high ethical standards
  3. C) Do not publicly bring attention to unethical behaviour, instead deal with it privately
  4. D) Fire all unethical employees
  5. E) Do nothing to reinforce the undesirable behaviour and it will not be repeated
Answer:  B
Diff: 2     Type: MC     Page Ref: 50
Skill:  Comprehension
Objective:  3.1

35) Which of the following is correct with regard to managerial ethics?
  1. A) A manager who discriminates against any ethnic minority in hiring is exhibiting illegal, but not unethical, behaviour.
  2. B) If a manager pays an employee less than he deserves because the manager knows the employee can’t afford to quit, the manager is clearly behaving unethically.
  3. C) Ethics are not usually an issue when a firm deals with customers.
  4. D) It is difficult to deal with ethical issues because there is much global variation in business practices.
  5. E) All of the statements are correct.
Answer:  D
Diff: 3     Type: MC     Page Ref: 51
Skill:  Comprehension
Objective:  3.1
36) When a Canadian company is operating in a country where bribes are legal, the Canadian government expects the company to
  1. A) use their judgment, since Canadian laws are not applicable.
  2. B) not pay any bribes at all.
  3. C) notify Canadian authorities that they may have to pay a bribe in order to do business in the foreign country.
  4. D) match the bribes that other competitive firms are paying so they can get the business.
  5. E) None of the statements are accurate.
Answer:  B
Diff: 2     Type: MC     Page Ref: 51
Skill:  Comprehension
Objective:  3.1


37) After a hurricane hit Halifax, 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 engaging in
  1. A) conflict-of-interest pricing.
  2. B) sharp business practices.
  3. C) crisis-based pricing.
  4. D) price gouging.
  5. E) It is not possible to tell from the information that is given.
Answer:  D
Diff: 2     Type: MC     Page Ref: 48
Skill:  Comprehension
Objective:  3.1

38) When DaimlerChrysler originally introduced the PT Cruiser, demand was so strong that some dealers would sell one only if the customer was willing to pay several thousand dollars over the sticker price. This is an example of
  1. A) effective business practice.
  2. B) price gouging.
  3. C) collusion.
  4. D) profit maximization.
  5. E) price lining.
Answer:  B
Diff: 2     Type: MC     Page Ref: 48
Skill:  Comprehension
Objective:  3.3

39) To show the company’s desire for employee ethical behaviour, many business firms have established
  1. A) an ethical review board.
  2. B) an office of ethical affairs.
  3. C) a whistle-blower reward system.
  4. D) random ethical audits.
  5. E) codes of conduct.
Answer:  E
Diff: 1     Type: MC     Page Ref: 51
Skill:  Knowledge
Objective:  3.1

40) Due to his formal position, John has access to certain information. If John uses this information to facilitate unethical behaviour and to keep it secret, he is illustrating which of the following reasons for unethical behaviour?
  1. A) Pressure
  2. B) Opportunity
  3. C) Rationalization
  4. D) Manipulation
  5. E) None of these
Answer:  B
Diff: 1     Type: MC     Page Ref: 50
Skill:  Knowledge
Objective:  3.1

41) The three general factors that have been identified as important in causing individuals to behave in unethical ways are
  1. A) pressure, opportunity, and rationalization.
  2. B) the chance for financial gain, increased status, and poor control systems.
  3. C) the chance for financial gain, status, and power.
  4. D) pressure from peers, subordinates, and superiors.
  5. E) pressure from external competitors, bosses, and investors.
Answer:  A
Diff: 1     Type: MC     Page Ref: 50
Skill:  Comprehension
Objective:  3.1

42) All of the following are functions of codes of ethics except
  1. A) they increase public confidence in a firm or its industry.
  2. B) they ensure that unethical behaviour will not occur in the firm.
  3. C) they may help stem the tide of government regulation.
  4. D) they improve internal operations by providing consistent ethical standards.
  5. E) they help management respond to problems that arise as a result of unethical behaviour.
Answer:  B
Diff: 1     Type: MC     Page Ref: 51
Skill:  Comprehension
Objective:  3.1

43) Approximately ________ of Canadian firms have codes of ethics, while approximately ________ of U.S. firms have them.
  1. A) one-third; two-thirds
  2. B) two-thirds; nine-tenths
  3. C) one-fifth; one-fourth
  4. D) one-half; one-half
  5. E) one-half; three-quarters
Answer:  B
Diff: 3     Type: MC     Page Ref: 51
Skill:  Knowledge
Objective:  3.1
44) John wants his employees to be aware that they should act ethically. He should
  1. A) fire anyone who behaves unethically.
  2. B) not draw public attention to any employee’s unethical behaviour, but instead deal with it privately.
  3. C) publicly reward ethical behaviour and ignore unethical behaviour.
  4. D) publicly discipline employees who behave unethically, but don’t fire them.
  5. E) adopt a written code of ethics.
Answer:  E
Diff: 2     Type: MC     Page Ref: 51
Skill:  Application
Objective:  3.1

45) Which of the following statements is most likely to be included in a company’s code of ethics?
  1. A) We reward high achievers.
  2. B) We strive for domination in the market.
  3. C) We achieve our objective by raising capital.
  4. D) We believe in our company brand.
  5. E) We reward all valuable contributions.
Answer:  E
Diff: 2     Type: MC     Page Ref: 51
Skill:  Application
Objective:  3.1

46) ________ is the view that a company’s only social responsibility is to make as much money as possible for its shareholders.
  1. A) Free market capitalism
  2. B) Managerial capitalism
  3. C) Globalization
  4. D) Mixed economy capitalism
  5. E) None of these
Answer:  B
Diff: 1     Type: MC     Page Ref: 52
Skill:  Knowledge
Objective:  3.2

47) The view that business should balance its commitments to important individuals and groups in its environment is known as
  1. A) managerial capitalism.
  2. B) social auditing.
  3. C) social responsibility.
  4. D) business ethics.
  5. E) stakeholder theory.
Answer:  C
Diff: 2     Type: MC     Page Ref: 51
Skill:  Knowledge
Objective:  3.2
48) All of the following groups are organizational stakeholders except
  1. A) employees.
  2. B) investors.
  3. C) customers.
  4. D) competitors.
  5. E) all of these groups are organizational stakeholders.
Answer:  D
Diff: 2     Type: MC     Page Ref: 52
Skill:  Knowledge
Objective:  3.2

49) Which of the following is the best description of organizational stakeholders?
  1. A) Competitors
  2. B) Government regulators
  3. C) The officers and key employees of an organization
  4. D) Individuals and businesses that own stock in a company
  5. E) Individuals and groups that are directly affected by the practices of a company
Answer:  A
Diff: 2     Type: MC     Page Ref: 52
Skill:  Knowledge
Objective:  3.2

50) Social return on investment (SROI) helps companies to
  1. A) improve their financial return on investment.
  2. B) increase employee satisfaction.
  3. C) understand, manage, and communicate the social value of their activities for stakeholders.
  4. D) respond to required government regulations on social responsibility
  5. E) improve the level of ethics within the company.
Answer:  C
Diff: 2     Type: MC     Page Ref: 52
Skill:  Comprehension
Objective:  3.2

51) Why did the fair trade movement develop?
  1. A) Because large industrialized countries were using unfair trading practices with developing countries
  2. B) Because pollution was increasing too rapidly in developing countries as a result of excessive investment in mining operations
  3. C) Because workers involved in producing commodities like coffee were not receiving fair payment for their products
  4. D) Because free trade agreements were hurting smaller producers
  5. E) Because there was a surplus of cotton as a result of highly efficient U.S. production
Answer:  C
Diff: 2     Type: MC     Page Ref: 52
Skill:  Comprehension
Objective:  3.2

52) Which of the following is the greatest challenge in meeting a firm’s social responsibility?
  1. A) Determining when to conduct ethical training
  2. B) Determining the contents of the code of ethics
  3. C) Determining when to conduct a social audit
  4. D) Knowing what social responsibility is
  5. E) Determining how to respond to the interests of one part of society (e.g., investors) which conflict with the needs of another part of society (e.g., customers)
Answer:  E
Diff: 2     Type: MC     Page Ref: 51-52
Skill:  Comprehension
Objective:  3.2

53) Which of the following questions would a company dedicated to increasing its level of corporate social responsibility be least likely to ask?
  1. A) “How can we afford to pay our employees more?”
  2. B) “Should we offer more sales in order to better serve our customers?”
  3. C) “Can we purchase better quality ingredients while still making a profit?”
  4. D) “Which charitable donations will make our investors most happy?”
  5. E) “If our profits go up, can we lay off some of our employees?”
Answer:  E
Diff: 2     Type: MC     Page Ref: 52
Skill:  Application
Objective:  3.2

54) The CEO of Perry’s Pizzeria, a rapidly growing restaurant chain, is committed to a high level of corporate social responsibility along with continued business success. Which action by the CEO would most enhance the company’s reputation for social responsibility?
  1. A) Using more nutritious but more expensive, ingredients
  2. B) Cutting employees’ wages and benefits to boost the company’s stock price
  3. C) Using marketing or advertising methods that would allow the company to discreetly reduce pizza size without also reducing the price
  4. D) Packaging products in material that costs less, even if customers object to the change
  5. E) Taking steps that would cause competitors to close their doors
Answer:  A
Diff: 2     Type: MC     Page Ref: 52
Skill:  Comprehension
Objective:  3.2


55) Jana and Kate are the owners of an upscale jewelry boutique that offers unique and much-desired accessories in an affluent neighborhood. Jana and Kate are concerned, however, that the company’s commitment to social responsibility has begun to diminish in various respects. How would this most likely be evident?
  1. A) Other local businesses may be forced to close their doors.
  2. B) The health of employees and their children is starting to suffer.
  3. C) Local investors and stakeholders seek to invest their money elsewhere.
  4. D) The boutique’s customer base may decrease sharply due to moderate increases in price.
  5. E) Employees may begin making fewer charitable personal donations.
Answer:  B
Diff: 2     Type: MC     Page Ref: 52
Skill:  Application
Objective:  3.2
56) Jordan is a recent college graduate with a degree in computer programming. He has just begun his first full-time job and is excited to apply the skills that he worked so hard to acquire. Though he excelled as a student, Jordan is anxious about how successful he will be as an employee. When an opportunity unexpectedly presents itself to take credit for a brilliant software program that someone else wrote, Jordan does not resist and claims the program as his own. Which of the following would least likely also happen along with Jordan’s decision?
  1. A) Other recently hired employees who learn of Jordan’s dishonesty are hesitant to report him because they think he is the boss’s favorite new employee.
  2. B) After thinking deeply about his behaviour, Jordan becomes better equipped to act ethically in the future.
  3. C) Without recognizing his behaviour as unethical, Jordan steals office supplies and reports more hours on his time sheet than he has actually worked.
  4. D) The company’s ethics committee agrees that employees should not be expected to tell the truth if honesty is not part of their personal ethics.
  5. E) An employee who reports Jordan’s dishonesty consequently suffers from psychological and emotional stress.
Answer:  D
Diff: 3     Type: MC     Page Ref: 51
Skill:  Application
Objective:  3.2


57) 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?
  1. A) Determining how to respond to the interests of one part of society which conflicts with the needs of another part of society
  2. B) Determining the contents of the code of ethics and what takes priority
  3. C) Determining when to conduct a social audit
  4. D) Knowing what social responsibility is
  5. E) Determining when to conduct ethical training for employees
Answer:  A
Diff: 3     Type: MC     Page Ref: 52
Skill:  Comprehension
Objective:  3.2

58) A chocolate company with a primary emphasis on ethical sourcing and procurement would most likely avoid which of the following?
  1. A) Neglecting the welfare of the farmers who grow cacao beans
  2. B) Reducing the size of their marketing department
  3. C) Developing new fat-free products
  4. D) Hosting a holiday party for all employees
  5. E) Reducing the funds allocated to the company health care program for employees
Answer:  A
Diff: 3     Type: MC     Page Ref: 51-52
Skill:  Application
Objective:  3.3
59) Consumerism is
  1. A) the group of laws dealing with retail commercial transactions.
  2. B) the movement that seeks to protect and expand the rights of consumers in their dealings with businesses.
  3. C) the right to be informed about all aspects of a product.
  4. D) the right to choose the product.
  5. E) the right to safe products.
Answer:  B
Diff: 2     Type: MC     Page Ref: 53
Skill:  Comprehension
Objective:  3.3


60) Which of the following illustrates consumers’ rights to safe products?
  1. A) Clothing must be labelled with information about its proper care.
  2. B) A new vacuum cleaner must be free of electrical hazards while in use cleaning a consumer’s home.
  3. C) There must be open competition in the marketplace.
  4. D) Procter & Gamble provides a toll-free telephone number for consumers to use for complaints or questions.
  5. E) Food products must list their ingredients.
Answer:  B
Diff: 2     Type: MC     Page Ref: 53
Skill:  Comprehension
Objective:  3.3

61) When a food company lists the ingredients that make up their products, which consumer right is it addressing?
  1. A) Right to choose
  2. B) Right to safe products
  3. C) Right to courteous service
  4. D) Right to be informed
  5. E) Right to be heard
Answer:  D
Diff: 2     Type: MC     Page Ref: 53
Skill:  Comprehension
Objective:  3.3

62) Social activism dedicated to protecting the rights of consumers in their dealings with businesses is called
  1. A) whistle-blowing.
  2. B) kiting.
  3. C) price gouging.
  4. D) consumerism.
  5. E) collusion.
Answer:  D
Diff: 1     Type: MC     Page Ref: 53
Skill:  Knowledge
Objective:  3.3
63) When two or more firms agree to collaborate on wrongful acts, it is referred to as
  1. A) consumerism.
  2. B) collusion.
  3. C) market segmentation.
  4. D) oligopoly.
  5. E) monopoly.
Answer:  B
Diff: 1     Type: MC     Page Ref: 53
Skill:  Knowledge
Objective:  3.3

64) The Canadian Competition Bureau investigated possible ________ by Hershey, Nestle, and Cadbury.
  1. A) unit pricing
  2. B) demand pricing
  3. C) price fixing
  4. D) price gouging
  5. E) price leadership
Answer:  C
Diff: 2     Type: MC     Page Ref: 53
Skill:  Knowledge
Objective:  3.3

65) With respect to the issue of counterfeit brands, it is correct to say that
  1. A) counterfeit brands used to be a big problem, but new legislation in various countries has reduced the problem considerably.
  2. B) counterfeit brands are a big problem in products like perfume and designer clothing, but less of a problem in pharmaceuticals and expensive wines.
  3. C) consumers benefit from counterfeit goods because they can get good products for lower prices.
  4. D) it is generally easy to tell the difference between counterfeit goods and the real thing.
  5. E) none of these.
Answer:  E
Diff: 2     Type: MC     Page Ref: 53-54
Skill:  Comprehension
Objective:  3.3

66) Arctic Glacier Inc., a Canadian company, was one of several companies served with subpoenas by the U.S. government as it investigated possible
  1. A) violation of monopoly rules.
  2. B) insider trading.
  3. C) cheque kiting.
  4. D) unsafe products.
  5. E) collusion.
Answer:  E
Diff: 2     Type: MC     Page Ref: 53
Skill:  Knowledge
Objective:  3.3

67) Which consumer right is violated by a company that restricts and interferes with competition?
  1. A) Right to be heard
  2. B) Right to choose what they buy
  3. C) Right to good prices
  4. D) Right to safe products
  5. E) Right to be informed
Answer:  B
Diff: 2     Type: MC     Page Ref: 53
Skill:  Comprehension
Objective:  3.3

68) Atlas Corp. offers a money back guarantee on products and provides complaint hot lines for its customers. This is an example of which of the following consumer rights?
  1. A) Right to be informed
  2. B) Right to choose
  3. C) Right to be heard
  4. D) Right to health and safety
  5. E) Right to low prices
Answer:  C
Diff: 1     Type: MC     Page Ref: 53
Skill:  Comprehension
Objective:  3.3

69) 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?
  1. A) Right to low prices
  2. B) Right to choose what they buy
  3. C) Right to safe products
  4. D) Right to be informed
  5. E) Right to be heard
Answer:  D
Diff: 2     Type: MC     Page Ref: 53
Skill:  Comprehension
Objective:  3.3


70) When the Alberta securities regulator brought charges against several executives at Grand Cache Coal Corp. because those executives sold company stock just before the company publicly disclosed negative news about its sales, this was an example of
  1. A) cheque kiting.
  2. B) insider trading.
  3. C) misrepresentation of finances.
  4. D) improper financial management.
  5. E) whistle-blowing.
Answer:  B
Diff: 2     Type: MC     Page Ref: 57
Skill:  Comprehension
Objective:  3.3
71) 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
  1. A) price gouging.
  2. B) smart business practice.
  3. C) price fixing.
  4. D) collusion.
  5. E) price lining.
Answer:  D
Diff: 2     Type: MC     Page Ref: 53
Skill:  Comprehension
Objective:  3.3

72) Bristol Corp. plans to introduce an inexpensive line of shoes to the Canadian market. It has found a manufacturer in Asia that can produce the shoes at a cost that will be cheaper than other brands of the same quality. Which of the following is a potential ethical implication that the company should consider before beginning production?
  1. A) The country’s existing labour laws and the factory working conditions
  2. B) The average exchange rate of the country’s currency over a ten-year period
  3. C) The challenges of doing business in a country with a nonconvertible currency
  4. D) The energy demands of the manufacturer’s facility
  5. E) The basic international business strategy it will use
Answer:  A
Diff: 3     Type: MC     Page Ref: 54
Skill:  Analysis
Objective:  3.3


73) Paramount Pizza wants to be seen as a socially responsibility company. It can support its claim of being a socially responsible company by
  1. A) using more nutritious ingredients even if they are more expensive.
  2. B) cutting employees’ wages and benefits in order to boost the company’s stock price.
  3. C) reducing pizza size while holding the price constant.
  4. D) packaging products in material that costs less, even if customers object to the change.
  5. E) taking actions to force competitors into bankruptcy.
Answer:  A
Diff: 2     Type: MC     Page Ref: 52-56
Skill:  Comprehension
Objective:  3.3

74) Martha is the owner of a business that regularly imports certain agricultural commodities from countries with poor economic conditions. If she wants to help the citizens of those countries, how can she best do that?
  1. A) By including labels on her products indicating where the commodities come from
  2. B) By hiring people who have visited these countries and are familiar with the conditions there
  3. C) By opening an outlet in these countries and creating jobs for the people there
  4. D) By purchasing more of the commodities
  5. E) By shipping free products to these nations
Answer:  C
Diff: 3     Type: MC     Page Ref: 57-58
Skill:  Analysis
Objective:  3.3
75) Carl and Kelly have opened a gymnastics center. If they want to behave in a socially responsible fashion, which action should they definitely avoid?
  1. A) Purchasing substandard gym equipment
  2. B) Advertising methods that are intended to increase profit
  3. C) Initiatives that decrease the satisfaction of investors
  4. D) Doubling enrollment fees for the program
  5. E) Providing attractive salaries for employees
Answer:  A
Diff: 2     Type: MC     Page Ref: 52-58
Skill:  Application
Objective:  3.3


76) Which of the following illustrates consumers’ rights to safe products?
  1. A) Food products must list their ingredients
  2. B) Open competition in the marketplace
  3. C) A new vacuum cleaner must be free of electrical hazards
  4. D) Procter & Gamble provides a toll-free telephone number for consumers to use for complaints or questions
  5. E) Clothing must be labelled with information about its proper care
Answer:  C
Diff: 2     Type: MC     Page Ref: 53
Skill:  Comprehension
Objective:  3.3

77) By adding labels on spray cans indicating that the contents are flammable and instructions on how to use it correctly, which consumer right is being met?
  1. A) Right to be informed
  2. B) Right to safe products
  3. C) Right to be heard
  4. D) Right to choose
  5. E) No consumer right is being satisfied.
Answer:  B
Diff: 2     Type: MC     Page Ref: 53
Skill:  Comprehension
Objective:  3.3

78) 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
  1. A) the right to choose.
  2. B) the right to be informed.
  3. C) the right to health and safety.
  4. D) the right to be heard.
  5. E) the right to everyday low prices.
Answer:  D
Diff: 2     Type: MC     Page Ref: 53
Skill:  Comprehension
Objective:  3.3

79) In the past, “gentlemen’s agreements” were often used to avoid competition or to divide up a market so that firms did not have to truly compete against each other. Which consumer right is being violated when companies block competition?
  1. A) Right to be heard
  2. B) Right to choose
  3. C) Right of consumers
  4. D) Right to safety
  5. E) Right to competition
Answer:  B
Diff: 2     Type: MC     Page Ref: 53
Skill:  Comprehension
Objective:  3.3

80) There are four areas of concern regarding ethics in advertising. They are
  1. A) truth-in-advertising, misleading pricing, bait-and-switch advertising, stealth advertising.
  2. B) advertising of counterfeit brands, stealth advertising, morally objectionable advertising, and truth-in-advertising.
  3. C) bait-and-switch advertising, advertising of counterfeit brands, stealth advertising, and morally objectionable advertising.
  4. D) truth-in-advertising, misleading price advertising, celebrity advertising, and morally objectionable advertising.
  5. E) misleading price advertising, truth-in-advertising, celebrity advertising, and advertising claims about product performance that are not true.
Answer:  B
Diff: 3     Type: MC     Page Ref: 53-54
Skill:  Knowledge
Objective:  3.3

81) When Procter & Gamble claimed that its Pantene shampoo made hair “10 times stronger,” the Chinese government decided that this constituted
  1. A) advertising of a counterfeit brand.
  2. B) morally objectionable advertising.
  3. C) lack of truth-in-advertising.
  4. D) misleading price advertising.
  5. E) stealth advertising.
Answer:  C
Diff: 2     Type: MC     Page Ref: 53
Skill:  Comprehension
Objective:  3.3


82) The International Chamber of Commerce estimated that the global trade in fake goods in 2014 was worth
  1. A) $200 million.
  2. B) $500 million.
  3. C) $30.5 billion.
  4. D) $300.8 billion.
  5. E) $1.7 trillion.
Answer:  E
Diff: 2     Type: MC     Page Ref: 5
Skill:  Comprehension
Objective:  3.3
83) When Sony Ericsson hired models to pose as “tourists” who asked real tourists if they would take their picture with Sony’s new camera cellphone, this was an example of
  1. A) advertising of a counterfeit brand.
  2. B) morally objectionable advertising.
  3. C) lack of truth-in-advertising.
  4. D) misleading price advertising.
  5. E) stealth advertising.
Answer:  E
Diff: 2     Type: MC     Page Ref: 54
Skill:  Comprehension
Objective:  3.3

84) Sam has noticed that the safety mechanism on the piece of equipment that he operates is not working. After repeatedly telling management about the defect but getting no response, he decides to report it to the provincial agency responsible for workplace safety. This is an example of
  1. A) collusion.
  2. B) insider trading.
  3. C) stealth advertising.
  4. D) violating the line of reporting.
  5. E) whistle-blowing.
Answer:  E
Diff: 2     Type: MC     Page Ref: 56
Skill:  Comprehension
Objective:  3.3


85) Jane is a whistle-blower because she has concerns about some of the actions of her company. Whistle-blowers
  1. A) tend to be employees who have just come to work for the firm.
  2. B) are promoted by top management as a reward for pointing out activities that might hurt the company.
  3. C) tend to be younger than other employees and would like to be promoted.
  4. D) often find themselves demoted or even fired for blowing the whistle on the company.
  5. E) are hired away by other firms because of their high ethical values.
Answer:  D
Diff: 2     Type: MC     Page Ref: 56
Skill:  Comprehension
Objective:  3.3

86) Which of the following is the best means of showing responsibility toward employees?
  1. A) Provide employees with equal opportunities without regard to race, sex, or other irrelevant factors
  2. B) Provide rewards for employees who go beyond the call of duty
  3. C) Provide a stock ownership plan for employees
  4. D) Provide a grievance system for employees
  5. E) Recruit employees from minority groups
Answer:  A
Diff: 2     Type: MC     Page Ref: 55-56
Skill:  Comprehension
Objective:  3.3
87) Even if management is behaving irresponsibly toward investors, stockholders may be reluctant to take action because
  1. A) a management change may drive the stock price down.
  2. B) it’s too much trouble.
  3. C) the creditors probably wouldn’t support them.
  4. D) the board of directors will overrule them.
  5. E) company management will retaliate.
Answer:  A
Diff: 2     Type: MC     Page Ref: 57
Skill:  Comprehension
Objective:  3.3


88) The president of a company has paid himself a large salary, a handsome bonus, received a large number of lucrative stock options, and hired his family members at high salaries. The president is probably guilty of
  1. A) collusion.
  2. B) improper financial management.
  3. C) cheque kiting.
  4. D) misrepresentation of finances.
  5. E) insider trading.
Answer:  B
Diff: 2     Type: MC     Page Ref: 57
Skill:  Comprehension
Objective:  3.3

89) The illegal practice of writing cheques against money that has not yet arrived at the bank on which the cheque has been drawn is called
  1. A) insider trading.
  2. B) whistle blowing.
  3. C) managing the monetary float.
  4. D) kickbacks.
  5. E) cheque kiting.
Answer:  E
Diff: 1     Type: MC     Page Ref: 57
Skill:  Knowledge
Objective:  3.3

90) Which term describes the process of using confidential information to gain from the purchase or sale of stocks?
  1. A) Generally accepted investment practice (GAIP)
  2. B) Cheque kiting
  3. C) Whistle blowing
  4. D) Insider trading
  5. E) General consensus on unethical business behaviour (GCUBB)
Answer:  D
Diff: 1     Type: MC     Page Ref: 57
Skill:  Knowledge
Objective:  3.3

91) Bob Crawford sold his shares in Texon Company after finding out from Texon’s CEO that its stock was about to drop in price because its soon-to-be-released quarterly financial update was going to show that earnings were lower than expected. Bob engaged in
  1. A) whistle-blowing.
  2. B) misrepresentation of finances.
  3. C) insider trading.
  4. D) an obstructionist stance to social responsibility.
  5. E) cheque kiting.
Answer:  C
Diff: 1     Type: MC     Page Ref: 57
Skill:  Comprehension
Objective:  3.3

92) Which of the following is an example of a company acting irresponsibly toward its investors?
  1. A) The board of directors does not declare a dividend
  2. B) Retained earnings are used to expand research and development instead of paying a dividend
  3. C) Top management misrepresents the firm’s financial situation
  4. D) The firm does not allow insider trading
  5. E) The firm uses retained earnings to finance growth
Answer:  C
Diff: 2     Type: MC     Page Ref: 57
Skill:  Comprehension
Objective:  3.3

93) Brandon Ltd. is accused of paying excessive salaries and providing excessive “perks” to top managers. The company may be engaging in
  1. A) insider trading.
  2. B) collusion.
  3. C) cheque kiting.
  4. D) improper financial management.
  5. E) price fixing
Answer:  D
Diff: 2     Type: MC     Page Ref: 57
Skill:  Comprehension
Objective:  3.3


94) Which of the following illustrates how a company could be irresponsible with respect to its investors?
  1. A) Use profits to fund research and development
  2. B) The president overstates the positive impact of a new contract
  3. C) The board of directors declares a stock split
  4. D) Management accepts a takeover bid from another company
  5. E) No dividends are declared even though the company made a profit
Answer:  B
Diff: 2     Type: MC     Page Ref: 57
Skill:  Comprehension
Objective:  3.3
95) Which three countries are the worst greenhouse gas emitters per capita?
  1. A) China, India, and Russia
  2. B) United States, Canada, and Australia
  3. C) China, Russia, and the Australia
  4. D) India, the United States, and Canada
  5. E) Japan, China, and Russia
Answer:  B
Diff: 3     Type: MC     Page Ref: 58
Skill:  Knowledge
Objective:  3.3

96) What are carbon credits?
  1. A) Credits given to countries that produce more oil than they consume
  2. B) Credits given to countries that install the most pollution equipment per capita
  3. C) Credits which are purchased by countries that give them the right to pollute the atmosphere
  4. D) Credits which must be purchased by countries after they have been found guilty of polluting the atmosphere
  5. E) Credits that are given to countries for producing the carbon that is needed to make oil
Answer:  C
Diff: 3     Type: MC     Page Ref: 58
Skill:  Comprehension
Objective:  3.3

97) With regard to the “cap and trade” system for trading carbon credits, it is correct to say that
  1. A) very little fraud has been uncovered in the system.
  2. B) the system has proven to be very effective.
  3. C) studies show that countries in Asia are not interested in the system.
  4. D) companies in developing countries buy credits which they sell to companies in industrialized countries.
  5. E) carbon credits essentially give companies the right to pollute the environment.
Answer:  E
Diff: 3     Type: MC     Page Ref: 58
Skill:  Comprehension
Objective:  3.3
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