Description

Contemporary Business 15th Edition Boone Test Bank

MATCHING
Complete the following using these terms.
a. outsourcing
b. diversity
c. entrepreneur
d. competitive differentiation
e. strategic alliance
f. capital
g. vision
h. factors of production
i. brand
j. relationship management
k. not-for-profit organizations
l. business ethics
1. _____ involves blending different genders, ethnic backgrounds, cultures, religions, ages, and
physical and mental abilities in order to enhance a firm’s chances of success.
2. _____ refers to technology, tools, information, and physical facilities.
3. _____ is the unique combination of organizational abilities, products, and approaches that sets a
company apart from competitors in the minds of consumers.
4. A partnership formed to create a competitive advantage for the businesses involved is known as
a(n) _____.
5. A(n) _____ is a name, terms, sign, symbol, design, or combination that identifies the products of
one firm.
6. The ability to perceive future marketplace needs and what an organization can do to satisfy them
is referred to as _____.
7. A person who seeks a profitable opportunity and then devises a plan to achieve that profit is
called a(n) _____.
8. _____ is a collection of activities that build and maintain ongoing, mutually beneficial ties
between a business and its customers and other parties.
9. To operate effectively, certain inputs called _____ systems are required for all economic systems.
10. _____ are businesslike establishments that have primary objectives other than returning profits to
their owners.
11. _____ refers to the standards of conduct and moral values involving decisions made in the work
environment.
12. A company that contracts with another business to perform functions previously handled by
internal staff is participating in _____.
1. ANS: b DIF: MEDIUM LO: 1.2 Factors of Production
Pg. 6 AACSB: Analytic BT: K
2. ANS: f DIF: MEDIUM LO: 1.2 Factors of Production
Pg. 6 AACSB: Analytic BT: K
3. ANS: d DIF: MEDIUM LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
4. ANS: e DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 11 AACSB: Analytic BT: K
5. ANS: i DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
6. ANS: g DIF: MEDIUM LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
7. ANS: c DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
8. ANS: j DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
9. ANS: h DIF: MEDIUM LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
10. ANS: k DIF: MEDIUM LO: 1.1 What Is Business?
Pg. 4 AACSB: Analytic BT: K
11. ANS: l DIF: MEDIUM LO: 1.7 What Makes a Company Admired?
Pg. 22 AACSB: Analytic BT: K
12. ANS: a DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
Chapter 2—Business Ethics and Social Responsibility
MATCHING
Complete the following using the terms listed.
a. Securities and Exchange Commission (SEC)
b. Occupational Safety and Health Administration
(OSHA)
c. False Claims Act
d. integrity
e. social audit
f. social responsibility
g. business ethics
h. sexual harassment
i. code of conduct
j. conflict of interest
k. product liability
l. postconventional stage
m. Regulation FD
n. whistle-blowing
o. green marketing
1. A formal statement that defines how an organization expects and requires employees to resolve
ethical questions is a(n) _____.
2. Some companies measure social performance by conducting a(n)_____ that identifies and
evaluates the company’s activities that relate to social issues.
3. The main federal regulatory agency in setting workplace safety and health standards is the _____.
4. _____ requires publicly traded companies to announce major information to the general public,
rather than first disclosing the information to selected investors.
5. A situation where a business decision may be influenced by the potential for personal gain is a(n)
_____.
6. Management’s acceptance of the obligation to consider profit, consumer satisfaction, and societal
well-being of equal value in evaluating the firm’s performance is _____.
7. When a publicly traded firm is suspected of unethical or illegal behavior, the _____ will conduct
an investigation.
8. Inappropriate actions of a sexual nature in the workplace is _____.
9. Having _____ means adhering to deeply felt ethical principles in all business situations.
10. The standards of conduct and moral values governing actions and decisions in the work
environment are _____.
11. A person in the _____ of ethical development is able to move beyond self-interest and take into
account the larger needs of society.
12. A strategy that emphasizes a firm’s commitment to environmentally friendly products and
production is _____.
13. The _____ is a law that protects whistle-blowers who file a lawsuit on behalf of the
government if they believe that a company has somehow defrauded the government.
14. _____ is an employee’s disclosure to company officials, government authorities, or the media of
illegal, immoral, or unethical practices of his or her employer.
15. _____ refers to the responsibility of manufacturers for injuries and damages caused by their
goods.
1. ANS: i DIF: MEDIUM LO: 2.3 How Organizations Shape Ethical
Conduct
Pg. 39 AACSB Ethics BT: K
2. ANS: e DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
3. ANS: b DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
4. ANS: m DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
5. ANS: j DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
6. ANS: f DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
7. ANS: a DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
8. ANS: h DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
9. ANS: d DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
10. ANS: g DIF: MEDIUM LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
11. ANS: l DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
12. ANS: o DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
13. ANS: c DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
14. ANS: n DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
15. ANS: k DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
Chapter 2—Business Ethics and Social Responsibility
MATCHING
Complete the following using the terms listed.
a. Securities and Exchange Commission (SEC)
b. Occupational Safety and Health Administration
(OSHA)
c. False Claims Act
d. integrity
e. social audit
f. social responsibility
g. business ethics
h. sexual harassment
i. code of conduct
j. conflict of interest
k. product liability
l. postconventional stage
m. Regulation FD
n. whistle-blowing
o. green marketing
1. A formal statement that defines how an organization expects and requires employees to resolve
ethical questions is a(n) _____.
2. Some companies measure social performance by conducting a(n)_____ that identifies and
evaluates the company’s activities that relate to social issues.
3. The main federal regulatory agency in setting workplace safety and health standards is the _____.
4. _____ requires publicly traded companies to announce major information to the general public,
rather than first disclosing the information to selected investors.
5. A situation where a business decision may be influenced by the potential for personal gain is a(n)
_____.
6. Management’s acceptance of the obligation to consider profit, consumer satisfaction, and societal
well-being of equal value in evaluating the firm’s performance is _____.
7. When a publicly traded firm is suspected of unethical or illegal behavior, the _____ will conduct
an investigation.
8. Inappropriate actions of a sexual nature in the workplace is _____.
9. Having _____ means adhering to deeply felt ethical principles in all business situations.
10. The standards of conduct and moral values governing actions and decisions in the work
environment are _____.
11. A person in the _____ of ethical development is able to move beyond self-interest and take into
account the larger needs of society.
12. A strategy that emphasizes a firm’s commitment to environmentally friendly products and
production is _____.
13. The _____ is a law that protects whistle-blowers who file a lawsuit on behalf of the
government if they believe that a company has somehow defrauded the government.
14. _____ is an employee’s disclosure to company officials, government authorities, or the media of
illegal, immoral, or unethical practices of his or her employer.
15. _____ refers to the responsibility of manufacturers for injuries and damages caused by their
goods.
1. ANS: i DIF: MEDIUM LO: 2.3 How Organizations Shape Ethical
Conduct
Pg. 39 AACSB Ethics BT: K
2. ANS: e DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
3. ANS: b DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
4. ANS: m DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
5. ANS: j DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
6. ANS: f DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
7. ANS: a DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
8. ANS: h DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
9. ANS: d DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
10. ANS: g DIF: MEDIUM LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
11. ANS: l DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
12. ANS: o DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
13. ANS: c DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
14. ANS: n DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
15. ANS: k DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
Chapter 3—Economic Challenges Facing Contemporary Business
MATCHING
Complete the following using the terms listed.
a. Consumer Price Index (CPI)
b. inflation
c. gross domestic product (GDP)
d. fiscal policy
e. monetary policy
f. equilibrium price
g. budget deficit
h. pure competition
i. supply
j. demand
k. productivity
l. recession
m. microeconomics
n. oligopoly
o. monopoly
1. Attempting to bring about changes in economic activity through changes in the size of the
nation’s money supply is called _____.
2. Price increases that reduce the amount of goods and services people can purchase with a given
amount of money are the result of ____________.
3. _____ measures the monthly average change in prices of goods and services.
4. The amount of goods and services available at various prices is known as _____________.
5. _____ is the relationship between the goods and services produced in a nation each year and the
inputs needed to produce them.
6. If the government spends more than it collects in taxes, then a(n) _____ occurs.
7. During a(n) _____, consumers frequently postpone major purchases and shift buying patterns
toward basic, functional products carrying low prices.
8. _____ is the sum of all goods and services produced within a country’s borders.
9. A(n) _____ is a market structure characterized by relatively few sellers and barriers to entry due
to high start-up costs.
10. The study of small economic units, such as individual consumers, families, and businesses, is
called _____________.
11. The use of government tax and spending policies to bring about desired changes in the economy
is called _____.
12. _____ is a market structure characterized by a large number of buyers and sellers exchanging
relatively homogenous products, with no single participant having a significant influence on
price.
13. _____ refers to the willingness and ability of buyers to purchase goods and services at various
prices.
14. In a(n) _____, a single seller dominates trade in a product for which buyers can find no close
substitute.
15. The point where the supply and demand curves intersect is the _____.
1. ANS: e DIF: MEDIUM LO: 3.4 Managing the Economy’s Performance
Pg. 84 AACSB Analytic BT: K
2. ANS: b DIF: MEDIUM LO: 3.3 Evaluating Economic Performance
Pg. 76 AACSB Analytic BT: K
3. ANS: a DIF: MEDIUM LO: 3.3 Evaluating Economic Performance
Pg. 76 AACSB: Analytic BT: K
4. ANS: i DIF: MEDIUM LO: 3.1 Microeconomics: The Forces of Supply
and Demand
Pg. 66 AACSB Analytic BT: K
5. ANS: k DIF: MEDIUM LO: 3.3 Evaluating Economic Performance
Pg. 76 AACSB Analytic BT: K
6. ANS: g DIF: MEDIUM LO: 3.4 Managing the Economy’s Performance
Pg. 84 AACSB Analytic BT: K
7. ANS: l DIF: MEDIUM LO: 3.3 Evaluating Economic Performance
Pg. 76 AACSB Analytic BT: K
8. ANS: c DIF: MEDIUM LO: 3.3 Evaluating Economic Performance
Pg. 76 AACSB Analytic BT: K
9. ANS: n DIF: MEDIUM LO: 3.2 Macroeconomics: Issues for the Entire
Economy
Pg. 71 AACSB Analytic BT: K
10. ANS: m DIF: MEDIUM LO: 3.2 Macroeconomics: Issues for the Entire
Economy
Pg. 71 AACSB Analytic BT: K
11. ANS: d DIF: MEDIUM LO: 3.4 Managing the Economy’s Performance
Pg. 84 AACSB Analytic BT: K
12. ANS: h DIF: MEDIUM LO: 3.2 Macroeconomics: Issues for the Entire
Economy
Pg. 71 AACSB Analytic BT: K
13. ANS: j DIF: MEDIUM LO: 3.1 Microeconomics: The Forces of Supply
and Demand
Pg. 66 AACSB Analytic BT: K
14. ANS: o DIF: MEDIUM LO: 3.2 Macroeconomics: Issues for the Entire
Economy
Pg. 71 AACSB Analytic BT: K
15. ANS: f DIF: MEDIUM LO: 3.1 Microeconomics: The Forces of Supply
and Demand
Pg. 66 AACSB Analytic BT: K
Chapter 4—Competing in World Markets
MATCHING
Complete the following using the terms listed.
a. offshoring
b. balance of trade
c. joint venture
d. dumping
e. imports
f. tariff
g. International Monetary Fund
h. World Trade Organization
i. free trade area
j. devaluation
k. exchange rate
l. absolute advantage
m. global strategy
n. quota
o. multidomestic strategy
p. balance of payments
q. comparative advantage
1. _____ are foreign-made products and services purchased by domestic consumers.
2. Countries establish a __________ where they can trade among themselves without trade barriers.
3. A(n) _____ is a tax levied on imported products.
4. A nation’s _____ is the rate at which currency can be exchanged for the currency of another
nation.
5. _____ refers to selling goods abroad at a price lower than that charged in the domestic market.
6. _____ describes the fall of currency’s value relative to other currencies.
7. A country has _____ in the marketing of a product if it has a monopolistic position or it produces
the product at the lowest cost.
8. A country’s _____ is the difference between its exports and imports.
9. Relocation of business processes to a lower-cost location overseas is known as ___________.
10. A(n) _____ develops and markets products to serve different needs and tastes of separate
national markets.
11. A limit on the amount of a particular product that a country can import during a specified time
period is a(n) _____.
12. A country’s _____ is the overall flow of money into and out of a country.
13. _________ monitors agreements among member nations, mediates disputes, and works to reduce
trade barriers throughout the world.
14. A(n) _____ allows a company to share risks, costs, profits, and management responsibilities with
another company.
15. A nation can have a(n) _____ in a product if it can supply it more efficiently and at a lower price.
16. The _____ was created to promote trade through financial cooperation, while eliminating barriers
in the process.
17. A(n) _____ uses a standardized product and marketing strategy worldwide.
1. ANS: e DIF: MEDIUM LO: 4.1 Why Nations Trade
Pg. 97 AACSB: Analytic BT: K
2. ANS: i DIF: MEDIUM LO: 4.4 Reducing Barriers to International Trade
Pg. 111 AACSB: Analytic BT: K
3. ANS: f DIF: MEDIUM LO: 4.3 Barriers to International Trade
Pg. 104 AACSB: Analytic BT: K
4. ANS: k DIF: MEDIUM LO: 4.2 Measuring Trade between Nations
Pg. 101 AACSB: Analytic BT: K
5. ANS: d DIF: MEDIUM LO: 4.3 Barriers to International Trade
Pg. 104 AACSB: Analytic BT: K
6. ANS: j DIF: MEDIUM LO: 4.2 Measuring Trade between Nations
Pg. 101 AACSB: Analytic BT: K
7. ANS: l DIF: MEDIUM LO: 4.1 Why Nations Trade
Pg. 98 AACSB: Analytic BT: K
8. ANS: b DIF: MEDIUM LO: 4.2 Measuring Trade between Nations
Pg. 101 AACSB: Analytic BT: K
9. ANS: a DIF: MEDIUM LO: 4.5 Going Global
Pg. 115 AACSB: Analytic BT: K
10. ANS: o DIF: MEDIUM LO: 4.6 Developing a Strategy for International
Business
Pg. 121 AACSB: Analytic BT: K
11. ANS: n DIF: MEDIUM LO: 4.3 Barriers to International Trade
Pg. 104 AACSB: Analytic BT: K
12. ANS: p DIF: MEDIUM LO: 4.2 Measuring Trade between Nations
Pg. 101 AACSB: Analytic BT: K
13. ANS: h DIF: MEDIUM LO: 4.4 Reducing Barriers to International Trade
Pg. 111 AACSB: Analytic BT: K
14. ANS: c DIF: MEDIUM LO: 4.5 Going Global
Pg. 115 AACSB: Analytic BT: K
110 15. ANS: q DIF: MEDIUM LO: 4.5 Going Global
Pg. 115 AACSB: Analytic BT: K
16. ANS: g DIF: MEDIUM LO: 4.3 Barriers to International Trade
Pg. 104 AACSB: Analytic BT: K
17. ANS: m DIF: MEDIUM LO: 4.6 Developing a Strategy for International
Business
Pg. 121 AACSB: Analytic BT: K
Chapter 5—Forms of Business Ownership and Organization
MATCHING
Complete the following using the terms listed.
a. sole proprietorship
b. small business
c. corporation
d. merger
e. acquisition
f. horizontal merger
g. conglomerate merger
h. cooperative
i. vertical merger
j. business incubators
k. business plan
l. alien corporation
m. preferred stock
n. franchising
1. A(n) _____ joins firms in the same industry that wish to diversify, increase their customer base,
cut costs, or offer expanded product lines.
2. The form of business ownership that is least subject to legal red tape is _____.
3. A(n) _____ occurs when one firm purchases the property and assumes the obligations of another
firm.
4. A(n) _____ combines firms operating at different levels in the production and marketing process.
5. A(n) _____ is a type of business ownership formed in one country but that operates in another
country.
6. During a(n) _____, two or more firms combine to form one company.
7. The form of business ownership that establishes the firm as a separate legal entity
is the _____.
8. _____ is a contractual agreement that specifies the methods by which a dealer can produce and
market a supplier’s good or service.
9. A(n) _____ is independently owned and operated, and is responsible for more than half of the
nation’s gross domestic product.
10. A(n) _____ business consists of owners who join forces to collectively operate all or part of the
functions in their industry.
11. A merger of firms in unrelated industries is called a(n) _____.
12. Small startup
ventures looking for lowcost
shared facilities can utilize _____, offered by local
community agencies.
13. Owners of _____ have limited voting rights, but are entitled to the earliest dividends.
14. Having a(n) _____ improves the chances of success for a new business by providing an orderly
statement of a company’s goals.
1. ANS: f DIF: MEDIUM LO: 5.10 When Businesses Join Forces
Pg. 160 AACSB: Analytic BT: K
2. ANS: a DIF: MEDIUM LO: 5.7 Forms of Private Business Ownership
Pg. 150 AACSB: Analytic BT: K
3. ANS: e DIF: MEDIUM LO: 5.10 When Businesses Join Forces
Pg. 160 AACSB: Analytic BT: K
4. ANS: i DIF: MEDIUM LO: 5.10 When Businesses Join Forces
Pg. 160 AACSB: Analytic BT: K
5. ANS: l DIF: MEDIUM LO: 5.9 Organizing a Corporation
Pg. 157 AACSB: Analytic BT: K
6. ANS: d DIF: MEDIUM LO: 5.10 When Businesses Join Forces
Pg. 160 AACSB: Analytic BT: K
7. ANS: c DIF: MEDIUM LO: 5.7 Forms of Private Business Ownership
Pg. 150 AACSB: Analytic BT: K
8. ANS: n DIF: MEDIUM LO: 5.6 Franchising
Pg. 147 AACSB: Analytic BT: K
9. ANS: b DIF: MEDIUM LO: 5.1 Most Businesses are Small Businesses
Pg. 134 AACSB: Analytic BT: K
10. ANS: h DIF: MEDIUM LO: 5.8 Public and Collective Ownership of
Business
Pg. 156 AACSB: Analytic BT: K
11. ANS: g DIF: MEDIUM LO: 5.10 When Businesses Join Forces
Pg. 160 AACSB: Analytic BT: K
12. ANS: j DIF: MEDIUM LO: 5.9 Organizing a Corporation
Pg. 157 AACSB: Analytic BT: K
13. ANS: m DIF: MEDIUM LO: 5.9 Organizing a Corporation
Pg. 157 AACSB: Analytic BT: K
14. ANS: k DIF: MEDIUM LO: 5.4 The Business Plan: A Foundation for
Success
Pg. 141 AACSB: Analytic BT: K
30. Which of the following are organized for profit and provide goods and services?
a. businesses
b. public schools
c. government
d. churches
ANS: a DIF: EASY LO: 1.1 What Is Business?
Pg. 4 AACSB: Analytic BT: K
31. All of the following statements are correct EXCEPT:
a. Successful businesses seek to meet their social
and ethical responsibilities.
b. Business provides goods and services necessary
to an economic system.
c. Business is the economic pulse of a nation.
d. Business includes nonprofit organizations that
provide services to the public.
ANS: d DIF: MED LO: 1.1 What Is Business?
Pg. 4 AACSB: Analytic BT: K
32. In accounting terms, profits are ________.
a. the difference between revenues and expenses
b. the difference between commissions earned and
receipts
c. the difference between sales and expenses
d. the sum of sales and expenses
ANS: a DIF: EASY LO: 1.1 What Is Business?
Pg. 4 AACSB: Analytic BT: K
33. In the U.S. economy, ________ are considered the reward for the risk of entering business.
a. revenues
b. generated income
c. profits
d. sales
ANS: c DIF: MED LO: 1.1 What Is Business?
Pg. 4 AACSB: Ethics BT: K
34. ________ is essential because it serves as a primary incentive for people to start companies, expand
them, and provide consistently high-quality competitive goods and services.
a. Vision
b. Profit
c. Market research
d. Philanthropy
ANS: b DIF: MEDIUM LO: 1.1 What Is Business?
Pg. 4 AACSB: Analytic BT: K
35. All of the following are businesses EXCEPT ________.
a. U.S. Postal Service
b. UPS
c. FedEx
d. AOL Time Warner
ANS: a DIF: EASY LO: 1.1 What Is Business?
Pg. 4 AACSB: Analytic BT: K
36. All of the following are typically part of the not-for-profit sector EXCEPT ________.
a. labor unions
b. religious organizations
c. hotels
d. museums
ANS: c DIF: MEDIUM LO: 1.1 What Is Business?
Pg. 4 AACSB: Analytic BT: K
37. A public-sector not-for-profit organization would include which of the following?
a. library
b. museum
c. charitable group
d. labor union
ANS: d DIF: MEDIUM LO: 1.1 What Is Business?
Pg. 4 AACSB: Analytic BT: K
38. The factors of production in an economic system are ________.
a. land, rent, capital, and human resources
b. capital, perseverance, natural resources, and
human resources
c. rent, wages, interest, and profit
d. natural resources, human resources, capital, and
entrepreneurship
ANS: d DIF: MEDIUM LO: 1.2 Factors of Production
Pg. 6 AACSB: Analytic BT: K
39. Timber Trails, a Northwest lumber company, utilizes ________ as its primary production factor.
a. human resources
b. entrepreneurship
c. capital
d. natural resources
ANS: d DIF: MEDIUM LO: 1.2 Factors of Production
Pg. 6 AACSB: Analytic BT: K
40. Donovan Corporation’s sources of capital can include all of the following EXCEPT ________.
a. cash dividends declared by Donovan’s board of
directors and paid to the stockholders
b. investments from stockholders
c. reinvested profits
d. investments from venture capitalists
ANS: a DIF: MED LO: 1.2 Factors of Production
Pg. 6 AACSB: Analytic BT: K
41. Technology, tools, information, and physical facilities for the operation of a business are examples of
________.
a. profits
b. wages
c. capital
d. interest
ANS: c DIF: EASY LO: 1.2 Factors of Production
Pg. 6 AACSB: Technology BT: K
42. A company that values employees as sources of ideas and innovation is utilizing its
_________________.
a. entrepreneurship
b. natural resources
c. capital
d. human resources
ANS: d DIF: MEDIUM LO: 1.2 Factors of Production
Pg. 6 AACSB: Technology BT: K
43. The human resources of a firm refer to ________.
a. everyone over 18 years of age
b. everyone who works for the business
c. full-time employees
d. top management
ANS: b DIF: EASY LO: 1.2 Factors of Production
Pg. 6 AACSB: Analytic BT: K
44. Tarek, a former middle manager from Alexander Manufacturing, owns and operates a Subway
franchise. Tarek is demonstrating ________.
a. social responsibility
b. socialism
c. entrepreneurship
d. pure competition
ANS: c DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
45. Businesses that operate in an environment where success or failure is determined by how well they
match and counter the offerings of competitors are operating under ________.
a. the private enterprise system
b. a social democracy
c. a monopoly
d. socialism
ANS: a DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
46. Capitalism is founded on ________.
a. the social changes that followed the Industrial
Revolution
b. the idea that 80 percent of the nation’s wealth
should be owned by no more than 20 percent of
the people
c. the belief that competition among business firms
best serves the needs of society
d. the idea that the government must own all
factors of production
ANS: c DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
47. In his book The Wealth of Nations, the Scottish economist Adam Smith was the first person to describe
________.
a. socialism
b. communism
c. capitalism
d. entrepreneurship
ANS: c DIF: EASY LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
48. By offering a lifetime warranty on its products, Warner Electronics has set itself apart from its
competition. This difference is known as Warner Electronics’ ___________.
a. private enterprise system
b. competitive differentiation
c. capitalism
d. natural resources
ANS: b DIF: EASY LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
49. When Greenlawn Inc. finds itself losing contracts because Lo-Price Lawn Co. charges less money,
Greenlawn responds by lowering its bids. This reaction demonstrates ________.
a. the invisible hand of competition
b. collision
c. the right to private property
d. social responsibility
ANS: a DIF: MED LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
50. Namesh recently sold his Ford Taurus to a personal friend. Namesh’s sale of his automobile illustrates
the right to ________.
a. freedom of choice
b. private property
c. profit
d. set ground rules for competitive activity
ANS: b DIF: MED LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
51. All of the following are basic rights within a private enterprise system EXCEPT ________.
a. private property
b. guaranteed profits
c. freedom of choice of investment
d. freedom of choice of employment
ANS: b DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
52. The right to profit means the ________.
a. risk taker is guaranteed the right to all profits
(after taxes) that are earned by the business
b. right to go into or out of business at any point
and for any reason
c. government will guarantee a profit
d. right to all benefits resulting from the ownership
of property
ANS: a DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
53. Which of the following is considered to be the most fundamental right of the private enterprise
system?
a. the right to private property
b. the right to guaranteed profits
c. freedom of choice
d. the right to fair competition
ANS: a DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
54. Citizens in a private enterprise system have the right to choose their employment, purchases, and
investments, illustrating their right to ________.
a. private property
b. credit
c. profit
d. freedom of choice
ANS: d DIF: EASY LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
55. All of the following are rights granted to citizens and to the government in a private enterprise system
EXCEPT the right to ________.
a. fair competition
b. permit price discrimination
c. select from among a variety of goods and
services
d. own property
ANS: b DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
56. Which of the following is a benefit of entrepreneurship?
a. low risk
b. flexibility
c. guaranteed profit
d. reduced competition
ANS: b DIF: EASY LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
57. In colonial society, real economic and political power was centered in ________.
a. metropolitan areas
b. areas west of the Mississippi River
c. rural areas
d. cities
ANS: c DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
58. The Industrial Revolution in England transformed America’s economy by introducing ________.
a. the concept of each worker producing one
complete product
b. labor unions
c. the factory system
d. the continuously moving assembly line
ANS: c DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
59. The American Industrial Revolution did not make real progress until ________.
a. a railroad system was built providing fast,
economical transportation
b. a good relationship was formed with England
c. the introduction of the automobile occurred
d. a reliable system of telephone communication
was established
ANS: a DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
60. Inventors such as Robert McCormick and Eli Whitney were part of the ___________.
a. marketing era
b. colonial era
c. relationship era
d. age of industrial entrepreneurs
ANS: d DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
61. Henry Ford is noted in business history for introducing the moving assembly line, which greatly
reduced the cost of producing a car. Assembly lines first became common during the ________.
a. relationship era
b. marketing era
c. Industrial Revolution
d. production era
ANS: d DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
62. Which of the following BEST distinguishes the philosophy of the marketing era from the philosophy
of the production era?
a. The marketing era was more consumeroriented.
b. The production era occurred after World War II.
c. The marketing era advocated price
discrimination.
d. The production era was more consumeroriented.
ANS: a DIF: MED LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
63. The business philosophy that advocates determining what consumers want and need, and then
designing products to satisfy those needs, is known as ________.
a. consumer orientation
b. self-sufficiency concept
c. work ethic
d. production concept
ANS: a DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
64. The concept of branding first emerged during the ________.
a. production era
b. relationship era
c. age of the industrial entrepreneur
d. marketing era
ANS: d DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
65. Blogs and social networking use __________ to manage relationships.
a. strategic alliances
b. marketing research
c. technology
d. business etiquette
ANS: c DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Technology BT: K
66. Technology has resulted in all of the following EXCEPT ________.
a. product obsolescence
b. the creation of new industries
c. the opening of new business opportunities
d. less business efficiency
ANS: d DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Technology BT: K
67. Concentrating on building and promoting products in hopes that enough customers will buy them in
order to cover costs and earn acceptable profits is called ________.
a. relationship management
b. marketing management
c. a strategic alliance
d. transaction management
ANS: d DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
68. Nurturing customer loyalty by gathering knowledge of customer needs and preferences is an approach
known as ________.
a. relationship management
b. transaction management
c. a strategic alliance
d. marketing management
ANS: a DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
69. A partnership is ________.
a. a category of relationship management
b. an affiliation of two or more companies
c. not common in the e-business world
d. the same as transaction management
ANS: b DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
70. Apple iPods sold on Amazon’s Web site signify the formation of a ________ to increase profits.
a. transaction alliance
b. brand partnership
c. strategic alliance
d. marketing agreement
ANS: c DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
71. Which of the following statements is NOT correct?
a. Workers change jobs less frequently today.
b. The size of the labor pool is decreasing.
c. The U.S. population is getting older.
d. The U.S. population is becoming more diverse.
ANS: a DIF: EASY LO: 1.5 Today’s Business Workforce
Pg. 17AACSB: Analytic BT: K
72. The number of people age 65 and over will ________ by 2030.
a. decrease by approximately 10 percent
b. double
c. increase by approximately 50 percent
d. increase by approximately 10 percent
ANS: b DIF: MEDIUM LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
73. Diverse employee teams tend to perform ________ and develop ________ than do homogenous
employee groups.
a. less effectively; better solutions
b. more effectively; better solutions
c. less effectively; worse solutions
d. more effectively; worse solutions
ANS: b DIF: MEDIUM LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Diversity BT: K
74. Outsourcing ________.
a. reduces the diversity of the workforce
b. can make a firm more competitive
c. increases staffing requirements
d. increases costs
ANS: b DIF: EASY LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
75. When a business employs an outside company to handle all customer correspondence and phone calls,
the business is ________ its customer service department.
a. outsourcing
b. branding
c. multitasking
d. shrinking
ANS: a DIF: MEDIUM LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
76. When Google opened offices in Tokyo, London, and Sydney, they were utilizing ________ by
relocating business activities to lower-cost locations overseas.
a. nearshoring
b. outsourcing
c. offshoring
d. employee sourcing
ANS: c DIF: MEDIUM LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
77. The work-comes-first lifestyle can, at times, be exemplified by:
a. Baby Boomers
b. Generation X
c. Generation Y
d. The EU
ANS: a DIF: EASY LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
78. The new employer-employee partnership has led to all of the following EXCEPT ________.
a. increased job security
b. sharing of financial information with employees
c. increased emphasis on listening to and
respecting employees
d. helping employees improve skills and
knowledge
ANS: a DIF: EASY LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
79. When a U.S. company contracts work to Mexico, it is ________.
a. nearshoring
b. nearsourcing
c. exproting
d. offshoring
ANS: a DIF: MEDIUM LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Communication BT: K
80. For today’s managers, which of the following is LEAST important?
a. the ability to work by strict rules
b. vision
c. critical thinking skills
d. creativity
ANS: a DIF: EASY LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
81. ________ is the ability to perceive marketplace needs and what an organization must do to satisfy
these needs.
a. critical thinking
b. social responsibility
c. vision
d. creativity
ANS: c DIF: EASY LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
82. Emily works for a pharmaceutical company and gives a presentation on the need to expand the
company’s geriatric division within the next ten years. Emily is helping to establish the company’s
________.
a. creativity
b. productivity
c. vision
d. critical thinking
ANS: c DIF: MEDIUM LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
83. In business, ________ refers to the ability to see better and different ways of doing business.
a. critical thinking
b. social responsibility
c. creativity
d. vision
ANS: c DIF: EASY LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
84. Restating issues in reverse, such as naming ways to lose customers, is a method of developing
________.
a. critical thinking
b. social responsibility
c. vision
d. creativity
ANS: a DIF: MEDIUM LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
85. When 3M managers decided to manufacture Post-it notes, a new product was born. This was an
example of ________ in action.
a. critical thinking skills
b. vision
c. social responsibility
d. creativity
ANS: d DIF: MEDIUM LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
86. Alejandro is seeking to revitalize his graphic design company with new innovations and has called a
brainstorming meeting with his top designers. Alejandro is practicing ________.
a. vision
b. productivity
c. critical thinking
d. creativity
ANS: d DIF: MEDIUM LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
87. Feedback from customers is an example of a(n) ________ that requires organizational change.
a. internal force
b. external force
c. change agent
d. marketing issue
ANS: b DIF: MEDIUM LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
88. Which of the following is NOT an example of an internal force that requires organizational change?
a. labor union demands
b. production problems
c. new technologies
d. new company goals
ANS: c DIF: MEDIUM LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
89. ________ refers to standards of conduct and moral values of a firm.
a. creativity
b. business ethics
c. a social audit
d. social responsibility
ANS: b DIF: EASY LO: 1.7 What Makes a Company Admired?
Pg. 22 AACSB: Ethics BT: K
90. “Newman’s Own” is a food product line that gives 100 percent of its after-tax profits to charity. This
company is practicing ________.
a. business ethics
b. social responsibility
c. customer satisfaction
d. creativity
ANS: b DIF: MEDIUM LO: 1.7 What Makes a Company Admired?
Pg. 22 AACSB: Ethics BT: K
91. When management adheres to a set of standards involving the right and wrong actions arising in the
work environment, management is practicing ________.
a. social responsibility
b. business ethics
c. social welfare
d. creativity
ANS: b DIF: EASY LO: 1.7 What Makes a Company Admired?
Pg. 22 AACSB: Ethics BT: K
92. When management’s decisions align with social and economic issues, the company is practicing
________.
a. creativity
b. business ethics
c. social welfare
d. social responsibility
ANS: d DIF: EASY LO: 1.7 What Makes a Company Admired?
Pg. 22 AACSB: Ethics BT: K
93. Social responsibility would include all of the following EXCEPT ________.
a. supporting the local United Way
b. buying goods and services from minority-owned
vendors
c. making campaign contributions to politicians in
the hope of obtaining a government contract
d. making contributions to the local public radio
station
ANS: c DIF: MEDIUM LO: 1.7 What Makes a Company Admired?
Pg: 22 AACSB: Ethics BT: K
TRUE/FALSE
94. Large corporations are defined as businesses, whereas small companies are more of an investment.
ANS: F DIF: EASY LO: 1.1 What Is Business?
Pg. 4 AACSB: Analytic BT: K
95. Companies are not required to be ethical to succeed in the long run.
ANS: F DIF: EASY LO: 1.1 What Is Business?
Pg. 4 AACSB: Ethics BT: K
96. In order to remain viable, not-for-profit organizations need to focus on profits even more than the
public service they provide.
ANS: F DIF: MEDIUM LO: 1.1 What Is Business?
Pg. 4 AACSB: Ethics BT: K
97. Just as with a for-profit business, the first priority for a not-for-profit organization is making a profit.
ANS: F DIF: MEDIUM LO: 1.1 What Is Business?
Pg. 4 AACSB: Analytic BT: K
98. Not-for-profit organizations are commonly exempt from federal, state, and local taxes.
ANS: T DIF: MEDIUM LO: 1.1 What Is Business?
Pg. 4 AACSB: Analytic BT: K
99. All factors of production are found in equal amounts in all businesses.
ANS: F DIF: EASY LO: 1.2 Factors of Production
Pg. 6 AACSB: Analytic BT: K
100. Capital includes money, machines, tools, buildings, and human resources.
ANS: F DIF: EASY LO: 1.2 Factors of Production
Pg. 6 AACSB: Analytic BT: K
101. Natural resources are linked to the factor payment of rent.
ANS: T DIF: MEDIUM LO: 1.2 Factors of Production
Pg. 6 AACSB: Analytic BT: K
102. Technology is considered to be capital.
ANS: T DIF: EASY LO: 1.2 Factors of Production
Pg. 6 AACSB: Technology BT: K
103. Technology and capital are considered two separate factors of production.
ANS: F DIF: MEDIUM LO: 1.2 Factors of Production
Pg. 6 AACSB: Technology BT: K
104. When farmers rent land in order to increase crop production, they are acquiring capital.
ANS: F DIF: EASY LO: 1.2 Factors of Production
Pg. 6 AACSB: Analytic BT: K
105. Entrepreneurship is synonymous with ‘risk-taking.’
ANS: T DIF: MEDIUM LO: 1.2 Factors of Production
Pg. 6 AACSB: Technology BT: K
106. The private enterprise system encourages government intervention.
ANS: F DIF: EASY LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
107. The private enterprise system is enhanced by maximized government participation.
ANS: F DIF: EASY LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
108. Adam Smith’s “invisible hand” refers to the battle among businesses for consumer acceptance.
ANS: T DIF: EASY LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
109. The private enterprise system is also referred to as capitalism.
ANS: T DIF: EASY LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
110. Private property is considered the most important right in the private enterprise system.
ANS: T DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
111. When customers enter a supermarket and select their favorite brand of laundry detergent, they are
exercising their right to freedom of choice.
ANS: T DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
112. When the government sets ground rules for competitive activity, the intent is to increase freedom of
choice for consumers.
ANS: T DIF: EASY LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
113. In the private enterprise system, government has no role to play in ensuring fair competition.
ANS: F DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
114. Competitive differentiation is discouraged in order for a business’ success.
ANS: F DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
115. Finding unique ways to use the factors of production is a common characteristic of most entrepreneurs.
ANS: T DIF: MEDIUM LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
116. Entrepreneurs are very conservative and usually invest only in sure winners.
ANS: F DIF: EASY LO: 1.3 The Private Enterprise System
Pg. 8 AACSB: Analytic BT: K
117. During the Industrial era, the focus was on agriculture and other rural activities.
ANS: F DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
118. The Industrial Revolution began in Germany and quickly spread to the rest of Europe.
ANS: F DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
119. The Industrial Revolution introduced a strong emphasis on the factory system.
ANS: T DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
120. One factor that led to the Industrial Revolution was the mechanization of agriculture.
ANS: T DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
121. A key element of the production era was the use of consumer research.
ANS: F DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
122. Assembly lines were introduced during the production era.
ANS: T DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
123. In consumer orientation, a company creates a product first, and then determines if the consumer will
likely purchase the product.
ANS: F DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
124. The Nike swoosh is an example of a brand.
ANS: T DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
125. The current philosophy among managers today is best described as transaction management.
ANS: F DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
126. Transaction management was introduced during the industrial era.
ANS: F DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Technology BT: K
127. Technology has revolutionized business communications.
ANS: T DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Technology BT: K
128. Relationship management refers to ongoing, mutually beneficial ties between a company and its
vendors.
ANS: F DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Technology BT: K
129. It is predicted that technology will completely eliminate all cubicle jobs.
ANS: F DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Technology BT: K
130. Relationship management concentrates on short-term interactions with customers.
ANS: F DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
131. The number of companies forming partnerships and strategic alliances has grown in recent years.
ANS: T DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
132. Amazon is an example of a successful e-business.
ANS: T DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Technology BT: K
133. Assume Motorola and Microsoft work on developing a new cell phone that also is a PDA. This is an
example of a strategic alliance.
ANS: T DIF: MEDIUM LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
134. The need to develop environmentally friendly products and processes is becoming a major new force
in business today.
ANS: T DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
135. A strategic alliance is a partnership formed to create competitive advantage for the businesses
involved.
ANS: T DIF: EASY LO: 1.4 Six Eras in the History of Business
Pg. 12 AACSB: Analytic BT: K
136. Managers are beginning to recognize the different needs of workers of different ages.
ANS: T DIF: EASY LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
137. During the next few years, the average age of the workforce is expected to increase.
ANS: T DIF: EASY LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
138. The supply for jobs is slowly becoming greater than the demand for workers.
ANS: F DIF: MEDIUM LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
139. Hispanics and Asians represent the fastest growing segments of the U.S. population.
ANS: T DIF: EASY LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
140. Research indicates that work teams consisting of a diverse group of individuals often are more
productive than less diverse work teams.
ANS: T DIF: MEDIUM LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Diversity BT: K
141. Even with advances in management and communications, manufacturing still accounts for most of the
annual output in the United States.
ANS: F DIF: EASY LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
142. Outsourcing is the use of outside vendors to produce goods or fulfill services and functions that were
previously handled in-house or in-country.
ANS: T DIF: MEDIUM LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
143. Today, workers are much less likely to remain with the same employer throughout their entire careers.
ANS: T DIF: EASY LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
144. The new employer-employee relationship requires firms to establish rigid rules to govern employee
activities.
ANS: F DIF: MEDIUM LO: 1.5 Today’s Business Workforce
Pg. 17 AACSB: Analytic BT: K
145. The managerial quality of vision is the ability to perceive marketplace needs and what an organization
must do to satisfy them.
ANS: T DIF: MEDIUM LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
146. Critical thinking skills and creativity are essential qualities for today’s managers.
ANS: T DIF: EASY LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
147. Not all people have creative skills.
ANS: F DIF: MEDIUM LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
148. Creativity is the capacity to develop well-tested solutions to common organizational problems.
ANS: F DIF: MEDIUM LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
149. Physical exercise releases endorphins, which can help a manager come up with creative ideas.
ANS: T DIF: MEDIUM LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
150. Mental exercises like brainstorming often foster creativity.
ANS: T DIF: EASY LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
151. Feedback from customers is an example of an internal force that would require change.
ANS: F DIF: MEDIUM LO: 1.6 The 21st-Century Manager
Pg. 20 AACSB: Analytic BT: K
152. Business ethics deal with the right versus wrong actions that arise in a work environment.
ANS: T DIF: EASY LO: 1.7 What Makes a Company Admired?
Pg. 22 AACSB: Ethics BT: K
153. Participating in not-for-profit programs is an example of exhibiting social responsibility.
ANS: T DIF: EASY LO: 1.7 What Makes a Company Admired?
Pg. 22 AACSB: Ethics BT: K
154. By supporting local charities, a firm is demonstrating social responsibility.
ANS: T DIF: EASY LO: 1.7 What Makes a Company Admired?
Pg. 22 AACSB: Ethics BT: K
34.A company removes a profitable product from the market because it may be dangerous. This company is
demonstrating ________.
a. ethical behavior
b. green marketing
c. conflict of interest
d. social welfare
ANS: a DIF: MEDIUM LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
35. Business ethics begins with ________.
a. a firm’s investors
b. the individual employee
c. the government
d. a firm’s customers
ANS: b DIF: MEDIUM LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
36. When management considers social and economic issues in decision making, the company is
practicing ________.
a. business ethics
b. consumerism
c. social responsibility
d. social welfare
ANS: c DIF: EASY LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
37. Businesses have responsibilities to ________.
a. investors and customers
b. investors, customers, employees, and society
c. investors, customers, and employees
d. investors only
ANS: b DIF: EASY LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
38. Which of the following statements best justifies why a company should act in an ethical manner?
a. The government will take action if a firm fails to
act ethically.
b. Acting ethically always maximizes profits in the
short run.
c. Acting ethically will help a company to prosper
in the long run.
d. The right thing to do is always the least
expensive alternative.
ANS: c DIF: EASY LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
39. Businesses should ________.
a. do what is right regardless of profits
b. find the balance between doing what is right and
doing what is profitable
c. do whatever is profitable
d. do whatever is in the company’s best interests
ANS: b DIF: EASY LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
40. Which of the following statements is correct?
a. Doing what is right can sometimes be difficult.
Social and ethical problems affect only a few
companies.
b. Setting ethical standards is always clear-cut.
c. Ethical conflicts never arise in trying to serve
the needs of separate constituents.
d. Setting ethical standards is easy.
ANS: a DIF: EASY LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
41. In today’s business environment, who can make the difference in ethical expectations and behavior?
a. everyone
b. no one
c. only top-level managers
d. only the CEO
ANS: a DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
42. Despite the recession, the ethical climate seems to be ___________.
a. declining
b. staying the same
c. improving
d. becoming less confusing
ANS: c DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
43. ________ are responsible for conducting employee training programs that help spot potential fraud
and abuse within a firm.
a. Department supervisors.
b. Ethics compliance officers
c. Human Resource managers
d. Social behaviorists
ANS: b DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
44. Which of the following is not a minimum requirement for ethics compliance programs?
a. high-level personnel responsible for compliance
b. government regulation
c. consistent enforcement
d. consistent improvement
ANS: d DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
45. Which of the following is not an example of unethical or illegal acts in the workplace?
a. misreporting time on the job
b. Internet abuse
c. whistle-blowing
d. safety violations
ANS: c DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
46. Technology has ________ ethical issues.
a. expanded the range of
b. reduced the range of
c. made little difference on the range of
d. eliminated most
ANS: a DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Technology BT: K
47. Which of the following is not a factor in determining an individual’s ethical development?
a. experiences
b. religion
c. culture
d. social audit
ANS: d DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Communication BT: K
48. Many people rationalize unethical acts because they ________.
a. feel pressured on their jobs to meet performance
goals
b. know they can get away with it
c. have no personal or moral values
d. are fundamentally unethical
ANS: a DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
49. Roberto decides not to cheat on his exam because he fears he will be caught and receive no credit if he
is caught. In which stage of ethical development is Roberto?
a. postconventional
b. preconventional
c. traditional
d. conventional
ANS: b DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
50. When an individual moves beyond his or her own needs and desires and takes the needs of society into
consideration when making decisions, in which stage of ethical development is this individual?
a. preconventional
b. conventional
c. postconventional
d. traditional
ANS: c DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
51. Individuals who focus only on their own interests when making decisions are at the ________ stage of
ethical development.
a. preconventional
b. conventional
c. postconventional
d. concentrations
ANS: a DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
52. Sean avoids using his office computer for personal use, even though his company does not have a
specific policy forbidding it. Sean is at the ________ stage of ethical development.
a. preconventional
b. concentrations
c. postconventional
d. conventional
ANS: d DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg.33 AACSB Ethics BT: K
53. If an individual follows personal principles for resolving ethical dilemmas and considers personal,
group, and societal interests, he or she is at the ________ stage of ethical development.
a. preconventional
b. conventional
c. postconventional
d. concentrations
ANS: c DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
54. Linda does not make personal long-distance phone calls at work because it will cost her employer
money. Which stage of ethical development is Linda in?
a. conventional
b. traditional
c. postconventional
d. preconventional
ANS: a DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
55. Al makes a point of turning off the lights in his office when he is not using it because it saves his
company money and saves energy for the environment. Which stage of ethical development is Al in?
a. conventional
b. postconventional
c. preconventional
d. traditional
ANS: b DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
56. Brianna focuses on her duty to family and work and bases her actions on the expectations of various
groups in her life. At which stage of individual ethics is Brianna?
a. postconventional
b. code of conduct
c. conventional
d. preconventional
ANS: c DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
57. Jeffrey Wigand, a former executive of Brown & Williamson who exposed his company’s practice of
intentionally manipulating the effect of nicotine in cigarettes on the CBS news program 60 Minutes,
had moved beyond self-interest and company duty to which stage of individual ethics?
a. preconventional
b. postconventional
c. conflict of interest
d. conventional
ANS: b DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
58. Sofia is an investment advisor and wants to recommend a stock she happens to own. How should Sofia
best deal with this potential conflict of interest?
a. She should not make the recommendation.
b. She should make a negative recommendation.
c. She should make a positive recommendation and
then sell the stock.
d. She should disclose the fact that she owns the
stock while making the recommendation.
ANS: d DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
59. Tanisha is a diabetes educator at a local clinic. Recently, she was offered a lavish trip by a sales
representative who has been pushing the clinic to use his company’s diabetes supplies. Tanisha
declined the gift. Which ethical challenge did she face?
a. whistle-blowing
b. honesty and integrity
c. cultural consequences
d. conflict of interest
ANS: d DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
60. How should a businessperson deal with a conflict of interest?
a. ignore it
b. send an email to his/her manager
c. disclose it or avoid it
d. report it only to close friends
ANS: c DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
61. Outside auditors are examining your company’s financial records. You know there may be an error and
will tell them about it but only if they ask. They do not ask. In this scenario, your ________ could be
questioned.
a. integrity
b. social responsibility
c. truthfulness
d. loyalty
ANS: a DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
62. During a meeting with government regulators, Nicole voluntarily points out a potential problem with a
new product her company is testing. Nicole has shown ________.
a. honesty
b. loyalty
c. truthfulness
d. integrity
ANS: d DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
63. Bob takes responsibility for an error made by his assistant on a project. Bob has shown ________.
a. loyalty
b. honesty
c. integrity
d. truthfulness
ANS: c DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
64. Embellishing your résumé shows a lack of ______ and ______.
a. honesty and loyalty
b. honesty and integrity
c. integrity and loyalty
d. competence and loyalty
ANS: b DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
65. ________ goes beyond truthfulness.
a. Honesty
b. Loyalty
c. Integrity
d. Competence
ANS: c DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
66. Harold knows of a defect in a product his company sells. He will disclose the defect but only if the
customer specifically asks about it. Harold’s ________ could be called into question.
a. whistle-blowing
b. integrity
c. loyalty
d. truthfulness
ANS: b DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
67. Mica learns that her company is secretly dumping untreated waste into the city sewer systems, and she
informs the local EPA office. All of the following describe Mica’s ethical situation EXCEPT:
a. She is acting as a whistle-blower.
b. She has a conflict of interest.
c. She is showing integrity.
d. She is showing loyalty.
ANS: d DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
68. Your supervisor asks you to conceal information from outside auditors examining the
company’s financial records. What is your ethical challenge?
a. loyalty versus truth
b. conflict of interest
c. honesty and integrity
d. You have no ethical challenge.
ANS: a DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
69. Mike was a foreman at Hi-Way Construction and discovered his company was deliberately using
faulty materials for a project. Although Mike was worried about his family’s financial security if he
lost his job, he went to authorities and informed them of the potentially dangerous construction. Mike’s
action is called ________.
a. ethical compliance
b. whistle-blowing
c. ethical allegations
d. good intentions
ANS: b DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: AP
70. Development of a corporate culture to support business ethics occurs on each of the following levels
EXCEPT ethical ________.
a. success
b. awareness
c. reasoning
d. leadership
ANS: a DIF: MEDIUM LO: 2.3 How Organizations Shape Ethical Conduct
Pg. 39 AACSB Ethics BT: K
71. ___________ requires that firms in the private sector provide procedures for anonymous reporting of
accusations of fraud.
a. Americans with Disabilities Act
b. Sarbanes-Oxley Act
c. Consumer Rights Act
d. Title VII
ANS: b DIF: MEDIUM LO: 2.3 How Organizations Shape Ethical Conduct
Pg. 39 AACSB Ethics BT: K
72. A formal statement that defines how the organization expects and requires employees to resolve ethical
questions is ________.
a. social responsibility statement
b. an organizational culture
c. a code of conduct
d. an ethical environmental statement
ANS: c DIF: MEDIUM LO: 2.3 How Organizations Shape Ethical Conduct
Pg. 39 AACSB Ethics BT: K
73. Which of the following can improve ethical reasoning in a company?
a. whistle-blowing
b. practical training sessions
c. mission statement
d. organizational culture
ANS: b DIF: EASY LO: 2.3 How Organizations Shape Ethical Conduct
Pg. 39 AACSB Ethics BT: K
74. Online simulation training such as the Ethics Challenge can help to improve ethical ________.
a. awareness
b. reasoning
c. leadership
d. action
ANS: b DIF: MEDIUM LO: 2.3 How Organizations Shape Ethical Conduct
Pg. 39 AACSB Ethics BT: K
75. Macrohard, Inc. provides support for employees faced with ethical dilemmas. An ethics officer is
available in the Human Resources office or through an employee hotline. This is an example of ethical
________.
a. reasoning
b. awareness
c. whistle-blowing
d. action
ANS: d DIF: EASY LO: 2.3 How Organizations Shape Ethical Conduct
Pg. 39 AACSB Ethics BT: AP
76. After meeting with employees, a manager realizes she has set performance goals unrealistically high
for her department’s employees. If she makes employee performance goals more realistic, what will
likely happen to the department’s ethical climate?
a. It will stay about the same.
b. It will improve.
c. Not enough information is provided to
determine the effect.
d. It will deteriorate.
ANS: b DIF: MEDIUM LO: 2.3 How Organizations Shape Ethical Conduct
Pg. 39 AACSB Ethics BT: K
77. Ethical __________ charges each employee personally to uphold the company’s core values and be
willing to base their actions on them.
a. leadership
b. awareness
c. action
d. reasoning
ANS: a DIF: MEDIUM LO: 2.3 How Organizations Shape Ethical Conduct
Pg. 39 AACSB Ethics BT: K
78. The sales manager decides to double each salesperson’s monthly quota. What impact is this action
likely to have on the company’s ethical climate?
a. It will improve.
b. It will remain the same.
c. It will deteriorate.
d. Not enough information is provided to
determine the effect.
ANS: c DIF: MEDIUM LO: 2.3 How Organizations Shape Ethical Conduct
Pg. 39 AACSB Ethics BT: K
79. Jack Welch, former CEO of General Electric, is respected in business circles for focusing his company
on the welfare of its customers and investors, and for ensuring GE would thrive in the long run. This
type of environment is an example of ethical ________.
a. action
b. reasoning
c. awareness
d. leadership
ANS: d DIF: MEDIUM LO: 2.3 How Organizations Shape Ethical Conduct
Pg. 39 AACSB Ethics BT: K
80. Which of the following would be LEAST likely to be a factor in evaluating a firm’s social
performance?
a. providing a safe, healthy workplace
b. respecting the cultural diversity of employees
c. holding company-sponsored social events
d. producing safe, high-quality products
ANS: c DIF: EASY LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
81. Businesses exercise social responsibility for all of the following reasons EXCEPT ________.
a. stakeholders expect it
b. profits are guaranteed
c. the company’s image is enhanced
d. management believes it is the ethical course of
action
ANS: b DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
82. When Target donates 5 percent of its federally taxable income to nonprofit groups, the company is
highlighting its ________.
a. social responsibility
b. code of conduct
c. social audit
d. business ethics
ANS: a DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
83. A formal procedure that identifies and evaluates all company activities relating to social issues is
known as a(n) ________.
a. ethical profile
b. social audit
c. social inventory
d. mission analysis
ANS: b DIF: EASY LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
84. In addition to financial assessments, Dominic has arranged for his company to conduct a(n) ________
to evaluate activities that relate to social issues, such as employment practices, environmental
protection, and philanthropy.
a. EEOC evaluation
b. code of conduct
c. social audit
d. social responsibility inventory
ANS: c DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: AP
85. The Wright Tire Co. uses a company-wide team of employees to identify company activities related to
social issues, report on how the firm is responding to those issues, and evaluate how effectively the
firm has met those issues. The Wright Tire team is conducting a(n) ________.
a. environmental impact audit
b. government-mandated audit
c. internal accounting audit
d. social audit
ANS: d DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
86. The ____________ of a coffee-growing company include its employees, customers, suppliers, and the
community members where the company is located.
a. social responsibility
b. corporate philanthropy
c. social audit
d. stakeholders
ANS: d DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
87. Reprocessing used materials so that they can be reused is known as ________.
a. rotation
b. conversation
c. recycling
d. ecology
ANS: c DIF: EASY LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: K
88. A strategy that promotes environmentally friendly products and production methods is called
________.
a. consumerism
b. recycling
c. ethical awareness
d. green marketing
ANS: d DIF: EASY LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: K
89. Timberland Company allows its employees to take paid six-month sabbatical leaves to work for
nonprofit organizations. This is an example of ____________.
a. corporate philanthropy
b. green marketing
c. whistle-blowing
d. consumerism
ANS: a DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: K
90. All of the following are examples of corporate philanthropy EXCEPT ________.
a. supporting the local public radio station
b. sponsoring a Red Cross blood drive
c. paying local property taxes
d. giving employees release time to participate in
volunteer activities
ANS: c DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: K
91. During the Olympics, several Nike ads were aired that demonstrated the company’s sponsorship of
various events. Nike was using ________ to align their marketing efforts with charitable giving.
a. business ethics
b. cause-related marketing
c. social responsibility
d. ethical awareness
ANS: b DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: AP
92. The public demand that businesses give proper consideration to consumer wants and needs in making
its decisions is known as ________.
a. conservation
b. political activism
c. ethics
d. consumerism
ANS: d DIF: EASY LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: K
93. Consumer Rights include all of the following EXCEPT the right to ________.
a. boycott
b. choose
c. be heard
d. be informed
ANS: a DIF: MED LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: K
94. According to ________ standards, when a drug company purchases a television ad, the company is
required to describe potential side effects of the drug, or at least provide a phone number or Web site
address for additional information.
a. Occupational Safety and Health Administration
(OSHA)
b. Food and Drug Administration (FDA)
c. Consumer Compliance
d. Securities and Exchange Commission (SEC)
ANS: b DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: K
95. Which federal agency is responsible for ensuring the safety of prescription drugs?
a. FDA
b. FTC
c. SEC
d. Federal Communications Commission (FCC)
ANS: a DIF: EASY LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: K
96. The doctrine of “the right to be heard” would be best reflected by ________.
a. product safety
b. disclosure of true annual interest rates on
revolving charge accounts
c. disclosure of sodium content on labels of
processed foods
d. a firm establishing a consumer appeals board
ANS: d DIF: MED LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: K
97. Which federal agency is responsible for setting workplace health and safety standards?
a. FCC
b. FDA
c. FTC
d. OSHA
ANS: d DIF: EASY LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: K
98. All of the following are current social issues related to business’s responsibilities to employees
EXCEPT ________.
a. sexual harassment
b. discrimination against workers over 40 years of
age
c. discrimination against workers under 40 years of
age
d. quality of life issues
ANS: c DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: K
99. Matt was diagnosed with a serious illness that requires aggressive treatment. Because his company
employs 50 or more people, it must allow Matt up to 12 weeks unpaid time off in one year, as granted
by the ________.
a. Family and Medical Leave Act
b. Equal Employment Opportunity Commission
c. Occupational Safety and Health Administration
d. Vocational Rehabilitation Act
ANS: a DIF: MED LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Analytic BT: AP
100. All of the following groups are specifically identified by federal equal employment opportunity laws
EXCEPT ________.
a. women
b. obese persons
c. people with disabilities
d. people over age 40
ANS: b DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Diversity BT: K
101. Rene’s boss has offered him a raise if Rene agrees to spend the night with her. This is an example of:
a. social responsibility
b. sexual harassment
c. sexism
d. whistle-blowing
ANS: b DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Diversity BT: K
102. On average, women with a college degree earn less money than men with a college degree. This is an
example of:
a. social responsibility
b. sexual harassment
c. sexism
d. whistle-blowing
ANS: c DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Diversity BT: K
103. Companies that adhere to high ethical standards ________.
a. often make poorer investments in the long run
b. always make higher profits
c. often make better investments in the long run
d. always make lower profits
ANS: c DIF: MEDIUM LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
104. At the federal level, the _________________ investigates suspicions of unethical or illegal behavior
by publicly traded firms. I
a. SEC
b. EEOC
c. FDA
d. OSHA
ANS: a DIF: EASY LO: 2.4 Acting Responsibly to Satisfy Society
Pg. 42 AACSB Ethics BT: K
TRUE/FALSE
105. Social and ethical issues are a bigger concern in smaller companies than larger companies
ANS: F DIF: EASY LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
106. Social responsibility is a concept that pertains only to small businesses.
ANS: F DIF: EASY LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
107. The Sarbanes-Oxley Act requires companies that have a code of ethics to publish them.
ANS: T DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
108. Teresa discovered unlawful conduct at her company and notified authorities. Under the Sarbanes-
Oxley Act of 2002, anyone who retaliates against Teresa can be prosecuted.
ANS: T DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
109. Ethical corporations consider first and foremost what is profitable.
ANS: F DIF: MEDIUM LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
110. Fundamentally, a business is responsible for customers, employees, investors, and the community
alike.
ANS: T DIF: MEDIUM LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
111. Companies that put profits ahead of safety are using a stakeholder model of business ethics.
ANS: F DIF: MEDIUM LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
112. Businesses must find a balance between doing what is right and doing what is profitable.
ANS: T DIF: EASY LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
113. Codes of conduct are playing an increasingly important role in business ethics.
ANS: T DIF: EASY LO: 2.1 Concern for Ethical and Societal Issues
Pg. 32 AACSB Ethics BT: K
114. The Sarbanes-Oxley Act aims to punish corporate fraud and corruption.
ANS: T DIF: EASY LO: 2.2 The Contemporary Ethical Environment Pg. 33
AACSB Ethics BT: K
115. Individual employees have a major influence over ethical expectations and behavior.
ANS: T DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
116. An individual employee acting ethically will have little influence on his or her coworkers.
ANS: F DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
117. The U.S. Sentencing Commission was created to protect employees who claim that they were unaware
of ethical violations that they were accused of committing.
ANS: F DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
118. Technology has helped decrease the amount of unethical behavior exhibited by businesses.
ANS: F DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Technology BT: K
119. Some employees rationalize questionable or unethical behavior by saying, “Everyone does it.”
ANS: T DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
120. The highest level of ethical and moral behavior is known as the postconventional stage.
ANS: T DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
121. Some people engage in activities that are contrary to their personal and moral values because they feel
pressured on their jobs.
ANS: T DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
122. Individuals at the same stage of ethical development always adopt the same style for resolving ethical
dilemmas.
ANS: F DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
123. Preconventional behavior is the term used to describe an employee’s disclosure to the media or
government authorities of illegal, immoral, or unethical practices of the organization.
ANS: F DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
124. Sara refrains from “padding” her expense account because it will hurt the company. Sara is at the
preconventional stage of moral and ethical development.
ANS: F DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
125. Jorge is a lawyer whose work habits help his company, as well as society in general. Jorge is at the
postconventional stage of moral and ethical development.
ANS: T DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
126. Successful managers are often able to discover that there is a clear-cut answer between what’s right
and what’s wrong.
ANS: F DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
127. On-the-job ethical dilemmas are common.
ANS: T DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
128. An advertising agency representing two companies that compete with one another has an obvious
conflict of interest.
ANS: T DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
129. A conflict of interest exists when a person is faced with a decision in which an action will harm one
individual or group while benefiting another.
ANS: T DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
130. Developing a close personal relationship with a client or supplier is only a conflict of interest if others
find out about the relationship.
ANS: F DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
131. The only safe way to handle a potential conflict of interest is to avoid situations in which one might
occur.
ANS: F DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
pg. 33 AACSB Ethics BT: K
132. Truthfulness is more significant than integrity.
ANS: F DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
133. Adhering to deeply felt ethical principles in business situations is known as loyalty.
ANS: F DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
134. Employers expect employees to generally act in the best interests of the organization.
ANS: T DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
135. Loyalty and honest often conflict with one another in the business world.
ANS: T DIF: EASY LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
136. Employees should always be loyal, regardless of the situation.
ANS: F DIF: MEDIUM LO: 2.2 The Contemporary Ethical Environment
Pg. 33 AACSB Ethics BT: K
137. An employee who “goes public” with evidence of improper actions by his or her employer is known as