Business ethics by shaw test bank

BUSINESS ETHICS BY SHAW TEST BANK
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Business Ethics by Shaw Test Bank,
Business Ethics by Shaw – Test Bank A+ Graded
Chapter 1—The Nature of Morality
MULTIPLE CHOICE
1. Which of the following characteristics distinguishes moral standards from other sorts of standards?
a. moral standards are purely optional
b. moral standards take priority over other standards, including self-interest
c. moral standards cannot be justified by reasons
d. moral standards must be set or validated by some authoritative body
2. Choose the statement that gives the most accurate description of etiquette:
a. the rules of etiquette are a fundamental branch of morality
b. conformity with the rules of etiquette is sufficient for moral conduct
c. etiquette refers to a special code of social behavior or courtesy
d. the rules of etiquette are backed by statutory law
3. Our relationship with the law is best described by which of the following?
a. To a significant extent, law codifies a society’s customs, norms, and moral values.
b. The law is a completely adequate guide to the moral standards that we should follow.
c. The law makes all immoral conduct illegal.
d. Violating the law is always immoral.
4. Which of the following is not one of the four basic kinds of law?
a. statutes b. constitutional law c. common law d. contractual law
5. A proper perspective of religion and morality is
a. only religion can tell us what is right and wrong

b. it’s not true that morality must be based on religion
c. religion never influences people’s moral beliefs
d. without religion, people wouldn’t have a reason to act morally
6. When religion and morality are considered,
a. the moral instructions of the world’s great religions are often general and imprecise.
b. most people act rightly only because their religion tells them to.
c. atheists are likely to be less moral than religious people.
d. in practice, people who share a religion will agree on all moral questions.
7. The divine command theory implies that
a. God commands us to do whatever our reason tells us is right.
b. God forbids stealing because stealing is wrong.
c. God leaves right and wrong up to us.
d. stealing is wrong only because God commands us not to steal.
8. Ethical relativism supports the theory that
a. what is morally right is what society says is morally right.
b. there are no moral values whatsoever.
c. morality is relative to the goal of promoting human well-being.
d. different societies have different ideas about right and wrong.
9. When ethical relativism is put into practice, it implies that
a. societies never share any moral values in common.
b. in ethics, sometimes the minority is right.
c. we cannot say that slavery is wrong if the society in question believes it is right.
d. as societies evolve, their morality improves.
10. Accepting a moral principle
a. is a purely intellectual act like accepting a scientific hypothesis.
b. generally involves a desire to follow that principle for its own sake.
c. means you will never go against that principle.
d. is a religiously based act of faith.
11. The example of Huckleberry Finn shows
a. one should always obey one’s conscience.
b. when in doubt, one should ignore one’s conscience.
c. we shouldn’t rely uncritically on what our conscience says.
d. unlike most people, Huckleberry Finn lacked a conscience.
12. Morality and self-interest
a. can sometimes conflict. c. can never come into genuine conflict.
b. boil down to the same thing. d. are in basic, irreconcilable conflict.
13. How did Aristotle view morality?
a. It’s necessary for us to try to be virtuous or excellent human beings.
b. Moral judgments are true because God commands them of us.
c. Moral judgments are determined differently by each culture.
d. It’s never right to help ourselves when we can help other people instead.

14. The code or principles of conduct that a person accepts
a. constitute the whole of his or her morality.
b. can be distinguished from the person’s morality in a broader sense that includes his or her values,
ideals, and aspirations.
c. rarely guide his or her conduct in practice.
d. are always attained from his or her religion.
15. The famous experiments by social psychologist Solomon Asch show
a. the truth of utilitarianism.
b. the power of peer pressure has been greatly exaggerated.
c. business organizations put more pressure on individual integrity than do other kinds of
organization.
d. even temporary groups can pressure people to conform.
16. The authors use the murder of Kitty Genovese to illustrate
a. ethical relativism. c. groupthink.
b. bystander apathy. d. the paradox of hedonism.
17. If an argument is valid, then
a. the argument is sound.
b. the argument’s conclusion must be true.
c. the argument’s premises are true.
d. its conclusion must be true, if its premises are.
18. Good moral judgments should be logical and
a. justified by fallacies.
b. proven beyond reasonable doubt.
c. based on facts and acceptable moral principles.
d. coincide with what most scientifically trained people think.
19. Philosophical discussion of moral issues typically involves
a. the revision and modification of arguments.
b. proof beyond a reasonable doubt.
c. circular reasoning.
d. determining what the majority thinks.
20. The following is a logical fact.
a. All valid arguments are sound arguments.
b. All sound arguments are valid arguments.
c. A sound argument may have a false conclusion.
d. A sound argument may have a false premise.
21. Choose the statement that is a true reflection of moral behavior.
a. Conscience is a perfectly reliable guide for moral behavior.
b. Peer pressure has no effect on whether or not people behave morally.
c. Bystander apathy appears to result in part from diffusion of responsibility.
d. All moral behavior is motivated from religious faith.
22. What criteria concerning moral judgments should we agree with?
a. As long as your conduct is legal, then it will be moral.

b. If you follow the rules of etiquette, your conduct will be moral.
c. Moral standards typically concern behavior that can be of serious consequence to human welfare.
d. If your conduct follows the guidelines of professional codes of ethics, it will be moral.
23. Which statement is true concerning moral principles and self interests?
a. Statutes are laws applied in the English-speaking world before there were any common laws.
b. Philosophers agree that morality is based on the commands of God.
c. “Groupthink” is a positive and necessary characteristic of all groups.
d. Morality serves to restrain our purely self-interested desires so that we can all live together.
24. Which of the following is an accurate statement?
a. There is a complete list of adequacy criteria for moral judgments that philosophers all agree on.
b. Professional codes are the rules that are supposed to govern the conduct of members of a given
profession.
c. Professional codes of ethics provide a complete and reliable guide to one’s moral obligations.
d. People who are exclusively concerned with their own interests tend to have happier and more
satisfying lives than those whose desires extend beyond themselves.
TRUE/FALSE
1. In business and elsewhere, an action can be legal and morally wrong.
2. For philosophers, the important question is not how we come to have the particular moral principles
we have, but whether we can justify them.
3. Organizational norms always and inevitably lead to groupthink.
4. Enron executives acted wrongly simply because they broke the law.
5. If you do the right thing only because you think you will profit from it, then you are truly motivated by
moral concerns.
6. Ethical relativism is the theory that what is right is determined by what a culture or society says is
right.
7. If your conduct is legal, it will also be moral.
8. An organization is a group of people working together to achieve a common purpose.
9. Moral standards concern behavior that can be of serious consequence to human welfare.
10. Rules of etiquette are always moral rules.
11. An individual does not have to follow the code of one’s profession.
12. Bystander apathy appears to result in part from diffusion of responsibility.
13. Most people don’t distinguish between a person’s “morals” and his or her “ethics.”
14. Business ethics is the study of what constitutes right and wrong, or good and bad, human conduct
in a business context.
15. “Etiquette” designates a special realm of morality.
16. There are four basic kinds of law: statutes, regulations, common law, and constitutional law.

17. In theory and practice, law codifies customs, ideals, beliefs, and a society’s moral values.
18. According to divine command theory, if something is wrong, then the only reason it is wrong is
that God commands us not to do it.
19. Our conscience evolved as we internalized the moral instructions of the parents or other authority
figures who raised us as children.
20. The paradox of hedonism (or the paradox of selfishness) is that people who are exclusively
concerned with their own interests tend to have happier and more satisfying lives than those who are
concerned about other people.
21. In a broad sense morality is the moral code of an individual or of a society (insofar as the moral
codes of the individuals making up that society overlap).
22. One of the major characteristics of an organization is the shared acceptance of organizational
rules by its members.
23. An argument is a group of statements, one of which is claimed to follow from the others.
24. An argument is valid only if all its premises are true.
25. According to Tom Regan, our considered moral beliefs are those we hold only after we have
made a conscientious effort (a) to attain maximum conceptual clarity, (b) to acquire all relevant
information, (c) to think about the belief and its implications rationally, (d) impartially, and with the
benefit of reflection, (e) coolly.
SHORT ANSWER
1. What is the divine command theory?
2. What is meant by “diffusion of responsibility”?
3. Some philosophers distinguish between morality in a broad sense and morality in a narrow sense.
What is this difference?
ESSAY
1. How do we develop our ethics? What are the primary sources for us to develop our ethical
position?
2. If religion isn’t needed for morality, then how can we know which moral judgments are best?
Chapter 2—Normative Theories of Ethics
MULTIPLE CHOICE
1. Consequentialism
a. is best represented by Ross’s theory of ethics.
b. states that sometimes the consequences of our actions can be morally relevant.
c. states that the moral rightness of an action is determined solely by its results.
d. differs from nonconsequentialism because nonconsequentialism denies that consequences have
any moral significance.
2. If you adopt ethical egoism as your moral code, then
a. you can never act honestly or be gracious or helpful to others.

b. you must endorse hedonism.
c. you must always avoid any unpleasant or painful experiences.
d. you believe that it is morally right to do whatever promotes your self-interest.
3. Egoism as a psychological theory
a. states that self-interest is the only thing that ever motivates anyone.
b. is the same thing as ethical egoism.
c. states that people are sometimes selfish.
d. is based on egoism as an ethical theory.
4. Which of the following represents a utilitarian belief?
a. Rightness is determined by what most people want, i.e., by majority rule.
b. Rightness is determined by what will bring about the most good.
c. We should concern ourselves only with the immediate results of our actions.
d. We must always disregard our own happiness when deciding what to do.
5. According to the utilitarian theory, an action is morally right if and only if
a. it makes the person who does it happy.
b. everyone prefers that action to any other action.
c. it maximizes total, net happiness.
d. it brings only happiness and causes no pain.
6. Utilitarians believe that
a. knowledge, friendship, and aesthetic satisfaction are intrinsically valuable (or inherently good).
b. we can predict with certainty the future consequences of our actions.
c. an action that leads to unhappiness is morally right if any other action that you could have
performed instead would have brought about even more unhappiness.
d. an action can’t be right if the people who are made happy by it are outnumbered by the people who
are made unhappy by it.
7. Which of the following considerations about utilitarianism is correct?
a. The great 19th century utilitarians, Jeremy Bentham and John Stuart Mill, believed that pleasure
and happiness were different things.
b. Unlike Mill, Bentham was only concerned with the amount of pleasure that an action produces, not
the quality of the pleasure.
c. Act utilitarianism and rule utilitarianism boil down to the same thing.
d. Utilitarians believe that we can’t compare one person’s happiness with that of another.
8. The case of the “deathbed promise” shows that
a. utilitarianism may lead to conclusions that conflict with commonsense morality.
b. keeping your promises never maximizes happiness.
c. it was wrong to have made the promise in the first place.
d. utilitarianism boils down to egoism.
9. Utilitarianism is appealing as a standard for moral decision making in business. Which of the
following provides a reason for this?
a. Utilitarianism provides an objective way of resolving conflicts of self-interest.
b. Utilitarianism provides a rigid approach to moral decision making.
c. Utilitarianism provides a fuzzy standard for formulating and testing policies.
d. Utilitarianism gives us firm rules to follow, rules that don’t permit exceptions.

10. Which of the following is true regarding Immanuel Kant’s beliefs?
a. He defended a consequentialist theory of right and wrong.
b. He believed that all duties are prima facie duties.
c. He believed that moral principles rest on empirical data, on observation and experiment.
d. He believed that reason by itself can reveal the basic principles of morality.
11. According to Kant
a. good will is the only thing that is good in itself.
b. an action has moral worth if it is consistent with the categorical imperative.
c. only actions based on feeling or sentiment have moral worth.
d. a self-interested person can never do the right action.
12. Imagine a shopkeeper who is honest because being honest is good for business. When the
shopkeeper refrains from cheating a customer, Kant would say this action
a. was wrong because its motive was impure.
b. was in accordance with duty, but not done from duty.
c. displayed a high level of moral worth.
d. shows that he was following the categorical imperative.
13. “If you want to go to law school, then you must take the LSAT exam.” This statement is an
example of
a. the transcendental imperative. c. a hypothetical imperative.
b. the categorical imperative. d. irrational behavior.
14. Kant believed that we should always act
a. in such a way that we can will the maxim of our action to be a local law.
b. in a way that treats success as an end in itself, never merely as means.
c. in a way that would be universally unacceptable to all rational beings.
d. in a way that we can will the maxim of our action to become a universal law.
15. According to W. D. Ross’s theory
a. aprima facie obligation is absolute and can never be overridden.
b. what we should do in any specific set of circumstances will always be self-evident.
c. it would be wrong to lie to a murderer even to save the life of a friend.
d. we have various moral duties that can’t be reduced to a single, overarching obligation.
16. Nonconsequentialists like Ross believe that
a. we have no obligation to promote general welfare.
b. utilitarianism doesn’t require us to sacrifice as much as we should to help other people.
c. morality permits each of us a sphere in which to pursue our own plans and goals.
d. people’s so-called “moral rights” are unimportant when determining the right course of action.
17. Supererogatory actions are
a. actions that are normally wrong to do, but can sometimes be right.
b. actions that it would be good to do but not immoral not to do.
c. actions that we are morally required to do, all things considered.
d. actions that are wrong even though they produce some good.
18. The statement that best defines rights is
a. all moral rights are legal rights.

b. a negative right is a right to receive certain benefits.
c. a right is an entitlement to act or to have others act in a certain way.
d. all moral rights are human rights.
19. Which of the following statements is true regarding human rights?
a. Human rights are equal rights; if X is a human right, then everyone has this right.
b. Human rights are transferable and thus “alienable”.
c. Human rights rest on particular roles and special relationships.
d. Human rights are not natural but are always grounded in a specific legal or political system.
20. Rule utilitarians
a. believe that the optimal moral code will not normally produce 100% compliance.
b. believe that the optimal moral code would consist of only one rule, namely, always act so as to
maximize happiness.
c. assume that everyone will always follow the rules, all the time.
d. believe that an action is wrong if it fails to maximize happiness.
21. For those who are trying to make moral decisions,
a. it is impossible to make progress on controversial ethical issues unless everyone shares the same
moral theory.
b. endorsing a moral principle doesn’t require you to apply it in all similar situations.
c. moral judgments don’t have to be related to some general moral principles.
d. in a moral discussion, clarifying the facts and spelling out the principles to which people are
appealing can help us to reach a solution.
22. A practical basis for discussing moral issues involves taking account of
a. effects, ideals, and obligations.
b. effort, duties, and organization.
c. compassion, intellect, and patience.
d. compliance, contribution, and consequences.
23. The only accurate statement about consequentalism is:
a. Utilitarianism is a nonconsequentialist ethical theory.
b. Utilitarianism is an egoistic normative theory.
c. Consequentialism says that the moral rightness of an action is determined solely by its results.
d. Nonconsequentialists deny that consequences have any moral significance.
24. A key idea of Immanuel Kant’s ethical theory is that:
a. all duties are prima facie duties.
b. the moral permissibility of our actions depends entirely upon their consequences.
c. we should treat people as ends in themselves, never merely as means.
d. only pleasure has intrinsic value.
25. Which of the following is true regarding utilitarian beliefs?
a. Utilitarians wish to maximize happiness not simply immediately, but in the long run as well.
b. Utilitarians contend that we can determine with certainty what the future consequences of our
present actions will be.
c. When choosing among possible actions, utilitarianism requires us to disregard our own happiness.
d. For the hedonistic utilitarian, knowledge, friendship, and aesthetic satisfaction are inherently good.

TRUE/FALSE
1. Adam Smith made the point that individual pursuit of self-interest (egoistic conduct), even when
subject to rules and constraints, always undermines the utilitarian goal of producing the most good for
all.
2. Rule utilitarianism applies the utilitarian standard, not to individual actions, but to moral codes as a
whole.
3. When a utilitarian like Jeremy Bentham advocates “the greatest happiness for the greatest
number,” we must consider unhappiness or pain as well as happiness.
4. The connection between rights and duties is that, generally speaking, if you have a right to do
something, then someone else has a correlative duty to act in a certain way.
5. According to Immanuel Kant, moral reasoning is based on observation.
6. According to Jeremy Bentham and John Stuart Mill, pleasure is the one thing that is intrinsically
good or worthwhile.
7. The rights guaranteed in the Bill of Rights are positive rights, not negative rights.
8. According to W. D. Ross, we have immediate intuitive knowledge of the basic prima facie moral
obligations/principles.
9. Richard Brandt defends a form of act utilitarianism.
10. All moral rights are legal rights.
11. By “maxim,” Immanuel Kant meant the subjective principle of an action, the principle that people
in effect formulate in determining their conduct.
12. Normative theories of ethics propose some principle or principles for distinguishing right actions
from wrong actions.
13. Nonconsequentialist theories of ethics never consider the consequences of an action or rule when
making a moral judgment.
14. The view that equates morality with self-interest is egoism.
15. Egoists only do what they feel like doing.
16. Ethical egoism says that human beings are, as a matter of fact, so constructed that they must
behave selfishly.
17. Jeremy Bentham thought that a community is no more than the individuals who compose it and
that the interests of the community are simply the sum of the interests of its members.
18. One feature about utilitarianism that makes it appealing as a standard for moral decisions in
business and nonbusiness organizations is that it provides a clear and straightforward basis for
formulating and testing policies.
19. According to Adam Smith, if business is left to pursue its self-interest, the good of society will be
compromised and harmed.

20. Immanuel Kant believed that it is only when we act out of empathy for others that our actions have
moral worth.
21. A hypothetical imperative tells us to act as we would want everyone to act in that situation.
22. Immanuel Kant believed that prostitution was immoral because, by selling their sexual services,
prostitutes allow themselves to be treated as only a means to an end.
23. A prima facie obligation is an obligation that can be overridden by a more important obligation.
24. A supererogatory act is an act that would be good to do, but not doing it is not wrong.
25. W. D. Ross denied that we have immediate, intuitive knowledge of the basic prima facie
obligations.
SHORT ANSWER
1. What is the difference between legal rights and moral rights and between negative rights and
positive rights?
2. According to Kant, when does an action have moral worth?
3. What is the difference between the categorical imperative and a hypothetical imperative?
4. State two alternative formulations of Immanuel Kant’s categorical imperative. Explain what they
mean.
5. Identify two forms of ethical egoism. What are these two forms and how do they differ from one
another?
6. What is a prima facie obligation?
7. Explain one of the two criticisms of Kant’s ethics.
8. Explain one of the three criticisms of Utilitarianism.
9. What is the difference between egoism as an ethical theory and psychological egoism?
10. According to Immanuel Kant, lying is never morally permissible. Why does he believe this?
ESSAY
1. Choose two theories of ethics from the reading and explain how you would properly apply them to
the “Blood for Sale” case.
2. How would the six points of utilitarianism be applied to “The Ford Pinto” case to come to a proper
resolution?
Chapter 3—Justice and Economic Distribution
MULTIPLE CHOICE
1. Talk of justice and injustice appeals to the related notions of
a. fairness, equality, desert c. feeling, sentiment, happiness
b. reason, reflection, deliberation d. fairness, impartiality, duty
2. Aristotle’s formal principle of justice states,
a. from each according to his or her ability, to each according to his or her need.

b. similar cases must be treated alike except where there is some relevant difference.
c. all people are to be treated the same in every situation.
d. from each according to his or her ability, to each according to his or her merit.
3. According to Mill’s utilitarianism,
a. rights are certain moral rules whose observance is of the utmost importance for the long-run,
overall maximization of happiness.
b. there are no rights.
c. the rights possessed by human beings remain unchanged for all times and places.
d. rights are those rules that a majority of the society would agree to behind the “veil of ignorance.”
4. According to libertarianism,
a. there are no natural, Lockean rights.
b. we have a basic right to assistance from others.
c. it would be unjust to coerce people to give food or money to the starving.
d. happiness takes priority over other moral concerns.
5. According to John Rawls, people in “the original position” choose the principles of justice on the
basis of
a. social utility.
b. their religion.
c. self-interest.
d. their intuitive knowledge of the natural rights of all human beings.
6. From John Stuart Mill’s viewpoint,
a. philosophical concern with justice began in the 19th century.
b. questions of morality form a subset of questions of justice.
c. forutilitarians, justice is a moral standard independent of the principle of utility.
d. not every issue of social utility was a matter of justice.
7. Mill justified utilitarianism from rival perspectives when he argued
a. that without utilitarianism to provide a determinate standard of justice, one is always left with a
plethora of competing principles of justice, all of which seem to have plausibility but are mutually
incompatible.
b. that social utility is irrelevant to issues of justice.
c. against worker participation.
d. that only utilitarianism itself, as a normative theory, can provide an answer to the question: What
economic system will bring more good to society than any other system?
8. In Anarchy, State and Utopia, Robert Nozick advocates
a. Libertarianism. b. Kantianism. c. Utilitarianism. d. Egoism.
9. If libertarianism is true, which of these statements is true?
a. We should endorse utilitarianism’s concern for total social well-being.
b. Pleasure takes priority over any other moral concern.
c. We should have a “night-watchman” state.
d. If a person comes into possession of a holding through a legitimate transfer, then, morally
speaking, she or he deserves that holding.

10. According to Locke,
a. individuals are morally entitled to take other people’s property.
b. property is a moral right.
c. individuals are not morally entitled to the products of their labor.
d. property acquisition is a duty.
11. According to John Rawls,
a. people in the original position choose the principles on the basis of self-interest.
b. in the original position, people must have full and complete knowledge.
c. justice forbids any social or economic inequalities.
d. liberty is of little or no importance compared to equality.
12. The veil of ignorance proposes that
a. those in the original position are supposed to choose principles on the basis of self-interest,
agreement seems unlikely.
b. one group would be supportive of another group benefiting even though the rules are different.
c. people are fully knowledgeable about themselves or situation allowing them to have a partial or
biased point of view.
d. agreement is difficult to attain.
13. The veil of ignorance assures us that people in the original position will be
a. difficult to come to agreement. c. biased.
b. impartial. d. forgiving.
14. Primary social goods include
a. poverty. c. status.
b. freedom of religion. d. leisure time activities.
15. John Rawls’ Theory of Justice lays within which type of tradition?
a. All for one and one for all. c. Feudal society.
b. Principled living. d. Social contract.
16. The difference principle of Rawls states
a. we are all created equal.
b. inequalities are only justified if they benefit the least advantaged.
c. we all deserve the same.
d. some do deserve more than others.
17. In association with labor and capital, Mill had contrasting views of
a. freedom of speech. c. welfare.
b. farmers’ markets profit. d. profit sharing.
18. Who is more likely to be sympathetic with the idea of reducing the disparities of income in society?
a. Utilitarians b. Libertarians c. Robert Nozick d. Milton Friedman
19. The first principle of Nozick’s entitlement theory concerns the original acquisition of
a. morals. c. case law.
b. goods, money, and property. d. the crown.

20. In Nozick’s example of Wilt Chamberlain, he argues that other theories of economic justice
inevitably fail to respect people’s
a. liberty. b. power of choice. c. skills. d. height.
21. To the libertarians, their concept of liberty includes a commitment to
a. hedonism. b. charity. c. private property. d. happiness.
22. Rawls rejects utilitarianism because
a. he saw it as a threat.
b. it might permit an unfair distribution of burdens and benefits.
c. governments wanted it.
d. it values moral purity.
23. Eminent domain is the ancient right of government to take what from an individual?
a. food b. clothing c. liberties d. property
24. The Supreme Court gave decision making power for Eminent domain to the
a. feds. c. townships.
b. states and local communities d. parents.
25. What philosopher believes the maximin rule is relevant to justice?
a. John Rawls b. John Stuart Mill c. Robert Nozick d. Aristotle
TRUE/FALSE
1. According to Robert Nozick, the basic moral rights possessed by all human beings are both
negative and natural.
2. Libertarians reject inheritance as a legitimate means of acquiring wealth.
3. Utilitarians are likely to be sympathetic to the argument that steps should be taken to reduce the
great disparities of income that characterize our society.
4. The phrase “the declining marginal utility of money” means that successive additions to one’s
income produce, on average, less happiness or welfare than did earlier additions.
5. Robert Nozick uses the Wilt Chamberlain story to show the importance of economic re-distribution.
6. Rawls’s theory of distributive justice is a form of utilitarianism.
7. According to Robert Nozick, property rights exist prior to any social arrangements and are morally
antecedent to any legislative decisions that a society might make.
8. The United States leads the world in executive pay.
9. According to John Rawls, people in the original position do not know what social position or status
they hold in society.
10. According to the “maximin” rule, you should select the alternative under which the worst that could
happen to you is better than the worst that could happen to you under any other alternative.
11. Thanks to changes in the tax system, in recent years income in the United States has become
more equal.

12. The distribution of income in Germany and Japan is far more unequal than that in the United
States.
13. Many philosophers believe (as Aristotle did) that we are required, as a formal principle of justice,
to treat similar cases alike except where there is some relevant difference.
14. Justice is frequently held to require that our treatment of people reflect their fundamental moral
equality.
15. Distributive justice concerns the morally proper distribution of social benefits and burdens.
16. For utilitarians, justice is an independent moral standard distinct from their general principle.
17. According to Case 3.2, “Battling Over Bottled Water”, water is the lifeblood of the earth.
18. According to Mill, to say that I have a right to something is to say that I have a valid claim on
society to protect me in the possession of that thing, either by force of law or through education and
opinion.
19. In his Principles of Political Economy, J.S. Mill argued for the desirability of breaking down the
sharp and hostile division between the producers or workers, on the one hand, and the capitalists or
owners, on the other hand.
20. According to libertarianism, liberty is the prime value, and justice consists in being free from the
interference of others.
21. Libertarianism involves a commitment to leaving market relations – buying, selling, and other
exchanges – totally unrestricted.
22. Libertarians would find it immoral and unjust to coerce people to give food or money to the
starving.
23. John Rawls’s second principle of justice states that insofar as inequalities are permitted — that is,
insofar as it is compatible with justice for some jobs or positions to bring greater rewards than others
— these positions must be open to all.
SHORT ANSWER
1. Talk of justice and injustice typically focuses on four related moral ideas. Explain what two of them
are.
2. According to John Stuart Mill, what does it mean to say that a person has a right to something?
3. What do economists mean by “the declining marginal utility of money” and how does Brandt use
the concept to argue for greater economic equality?
4. Briefly explain the basic principles of Nozick’s entitlement theory.
5. According to Smith, if the market is left without regulation, will it eventually reward those that
deserve it?
6. What does Rawls mean by the original position and the veil of ignorance?
7. What is the “maximin” rule for making decisions and what role does it play in Rawls’s argument?
8. Define “Lockean rights” in your own words.

9. Explain the relationship between justice and fairness.
ESSAY
1. Compare and contrast how Mill and Nozick would explain why stealing is wrong.
2. Would Nozick’s theory of justice find the poverty in America to be just or unjust?
3. Is Bill Gates’s accumulation of wealth just or unjust, according to John Stuart Mill’s theory of
justice?
4. How would Rawls view an inheritance from a family member?
5. Can wealth legitimately be spread equally among the people of a nation according to any theory of
justice we have discussed?
Chapter 4—The Nature of Capitalism
MULTIPLE CHOICE
1. Which of the following historical stages of capitalism came first?
a. financial b. mercantile c. industrial d. state welfare
2. The profit motive
a. is a fundamental feature of all societies.
b. is no longer a key feature of capitalism.
c. must be checked by competition if society is to benefit.
d. is basically immoral.
3. A basic tenet of capitalism is that
a. property refers only to physical objects.
b. ownership is a simple relationship between a person and the thing owned.
c. capitalism requires private ownership of the major means of production.
d. in the 21st century, capitalism no longer requires capital.
4. The concept of the “invisible hand” means
a. pursuit of private gain will bring the best overall results.
b. although it can’t be seen, the hand of government controls the economy.
c. feudalism inevitably gives rise to capitalism.
d. externalities must be internalized.
5. A basic premise of Adam Smith’s invisible hand argument is
a. human beings try to avoid acquisitive behavior.
b. when people are left to pursue their own economic interests, disaster looms.
c. the division of labor, though good for the firm, reduces overall efficiency.
d. We often get what we want from others by offering something they need from us.
6. One of the key features of capitalism is
a. favoritism. b. cooperation. c. inequality. d. competition.
7. Some critics of capitalism believe that it rests on a flawed view of human beings because
a. capitalism produces equality.
b. capitalism eliminates poverty.

c. capitalism assumes that well-being comes from greater material consumption.
d. capitalism offers a higher sense of purpose.
8. One reason for believing that in practice capitalism fails to live up to its own ideal of competition is
a. we have government subsidies and protective tariffs.
b. monopolies control almost all areas of economic life.
c. so many small companies go bankrupt.
d. the outsourcing of jobs.
9. Karl Marx believed that
a. capitalist workers suffer from alienation.
b. capitalism no longer exploits workers.
c. industrialization does away with alienation.
d. workers are alienated from their products, but not from themselves or other people.
10. An assessment of work in America is
a. American manufacturing is growing faster than ever.
b. American corporations ignore short-term performance.
c. manufacturing still employs more people than government.
d. many manufacturing companies have become “hollow” or “weightless”.
11. An exclusive focus on short-term performance
a. is the best guarantee of a company’s long-term performance.
b. has helped to create a high-pressure environment conducive to fraud.
c. encourages long-term research and development.
d. hurts stock prices.
12. Evidence for the idea that American manufacturing is declining is
a. the fact that government now employs more people than manufacturing.
b. a reluctance to outsource.
c. fewer “hollow” corporations.
d. a shrinking trade deficit.
13. According to one survey of cultural values
a. Americans value work more than Japanese do.
b. for Americans, only good health is more important than work.
c. Americans typically value things like their children’s education and a satisfactory love life more than
work.
d. Americans place no value on work, only on money.
14. Which statement best describes capitalism?
a. Capitalism is an economic system in which the means of production and distribution is in state
hands.
b. Capitalism is an economic system that operates under the profit motive.
c. Capitalism is an economic system that dispenses with competition.
d. Capitalism is an economic system where the profits generated belong to the state as a whole.
15. Which of the following is an accurate statement?
a. Adam Smith defends capitalism by appealing to the idea of a natural, moral right to property.
b. Adam Smith denies that human beings are, by nature, acquisitive creatures.

c. A common defense of capitalism is the argument that people have a fundamental moral right to
property and that our capitalist system is simply the outcome of this natural right.
d. Utilitarians oppose capitalism in principle.
16. Marxism states
a. capitalism leads to a concentration of property and thus a concentration of resources and power in
relatively few hands.
b. socialism will eventually be replaced by financial capitalism.
c. the means of production should be placed under the control of the bourgeoisie.
d. only workers who are poorly paid in a capitalist system are alienated.
17. Which of the following accurately reflects the concept of Marxism?
a. It is only within a capitalist economic system that workers are not alienated from the products of
their labor.
b. Only workers who are poorly paid for their labor are alienated.
c. Within a capitalist economic system, the activity of labor is an end in itself and, as a result, has
intrinsic value.
d. Labor is alienated in a capitalist economic system (in part) because the labor of a worker stands
opposed to the worker as an autonomous power.
18. Which statement accurately describes capitalism?
a. Industrial capitalism is characterized by pools, trusts, holding companies and an interpenetration of
banking, insurance and industrial interests.
b. Mercantile capitalism emerged in the United States in the period directly following the civil war.
c. In state welfare capitalism the government plays an active role in regulating economic activities in
an effort to smooth out the boom-and-bust pattern of the business cycle.
d. Financial capitalism developed in the period immediately prior to the Renaissance.
19. For employees who are paid handsomely for their efforts, Marx said their work would ultimately
prove to be
a. profitable to them. c. meaningless to them.
b. expensive to them. d. tireless.
20. For the first time since the Industrial Revolution, less than _____ percent of the American
workforce was employed by manufacturing.
a. 10 b. 25 c. 50 d. 62
21. Though many jobs are outsourced, most economists believe
a. Mexico is the place to work.
b. the United States is in trouble.
c. the economy will create new jobs in the USA.
d. manufacturing will make a comeback.
22. Many economists are concerned that the growing trade deficit makes the U.S. vulnerable to
a. terrorist attacks. c. ease.
b. depression. d. economic extortion.
23. Rather than strong work ethic, a common attitude is:
a. Me-first c. I like it easy
b. Happy days are here to stay d. Let the boss sweat it

24. How many Americans believe that “if you work hard enough, you’ll make it?”
a. One out of two. b. One out of three. c. One out of four. d. One out of five.
25. The Fugger dynasty was an example of
a. industrial capitalism. c. financial capitalism.
b. mercantile capitalism. d. globalized capitalism.
TRUE/FALSE
1. Worker control socialism is a hybrid economic system with no marketplace and no profits.
2. Utilitarians reject the very idea of a natural right to property.
3. If it’s true that individuals have a natural right to own property, then there can be no limits on this
right.
4. Some critics believe that “competition is not a good” because trying to do well and trying to beat
others are two different things.
5. Adam Smith claims that the people seeking self-interest in a free market through competition can
benefit society as a whole.
6. Capitalism is possible without private property.
7. According to Marx, when workers are alienated they are not truly free.
8. None of the specific measures proposed by Marx and Engels in the Communist Manifesto have
been implemented in capitalist countries.
9. Companies that in years past were identified with making goods of all sorts now are likely to
produce only the package and the label.
10. Capital is that money that is invested for the purpose of making more money.
11. Socialism is an economic system characterized by public ownership of property and a planned
economy.
12. According to Alfie Kohn, competition promotes individual and group achievement better than
cooperation.
13. Outsourcing is a practice where companies buy parts or whole products from other producers,
both at home and abroad.
14. The capitalism that we know today in the United States is a “pure” form of laissez-faire capitalism.
15. According to a socialist, the best economic system would be one where the means of production
and distribution are in the hands of the bourgeoisie.
16. Government programs often subsidize American businesses and protect them from competition.
17. Implicit in capitalism is the view that human beings aim to maximize their economic self-interest.
18. According to Adam Smith, the division of labor decreases economic activity.
19. As a classical moral justification of capitalism, the natural right to property is a utilitarian
justification.

20. The sense of private property that is central to capitalism is the ownership of the means of
production and distribution.
21. What we call capitalism did not fully emerge until the Renaissance in Europe during the 15th and
16th centuries.
22. Socialism is an economic system characterized by public ownership of the means of production
and distribution, and a planned economy.
23. The U. S. trade deficit has shrunk significantly in recent decades.
24. Property ownership involves a generally complex bundle of rights and rules governing how, under
what circumstances, and in what ways both the owner and others can use, possess, dispose of, and
have access to the thing in question.
25. According to John Stuart Mill, what makes capitalism a desirable economic system is the type of
worker-capitalist relationship inherent in capitalism.
SHORT ANSWER
1. What is the difference between capitalism and socialism? What is “worker control socialism”?
2. What are the five different historical forms of capitalism?
3. What are the four features of capitalism?
4. Sometimes capitalism is defended based on the idea that we have a natural right to property. How
might this defense be criticized?
5. What is the “invisible hand” of Adam Smith?
6. How do defenders of capitalism respond to critics who point to the profound economic inequalities
that characterize capitalist society?
7. Why do some critics of competition believe that it isn’t all that it’s cracked up to be?
8. What reason is there for thinking that American manufacturing is declining?
9. What does it mean to say that American companies are too focused on the short term?
10. What is capitalism’s view of human nature?
ESSAY
1. Can we justly criticize capitalism for leading to exploitation? Compare and contrast how this
question can be answered using two different theories of ethics.
2. Is manufacturing vital to the success and well being of America? Justify your answer
3. Is Walmart a positive or negative influence on the American economy? Justify your position with
information from the “One Nation Under Walmart” article.
4. What objection to laissez-faire do you find the most persuasive? How might one defend laissez-
faire from such an objection?
5. How can you justify the role of “sweatshops” after reading the article, “In Defense of International
Sweatshops”? Defend your position with facts.

Chapter 5—Corporations
MULTIPLE CHOICE
1. The statement that accurately describes corporations is
a. corporate shareholders have limited liability for their debts.
b. corporations must be “publicly held” and thus traded on the stock market.
c. corporations are always for-profit.
d. corporate shareholders are immediately entitled to any profits.
2. Corporations differ from partnerships and other forms of business association in two ways. One of
these is that
a. they are regulated by the Federal Trade Commission.
b. they are formed simply by an agreement entered into among their members.
c. they must be publicly registered or in some way officially acknowledged by the law.
d. their shareholders are entitled to their share of the company’s profits as soon as they are
ascertained or determined.
3. The first corporations
a. were towns, universities, and ecclesiastic orders.
b. emerged in the 19th century.
c. were government owned.
d. were profit-making associations.
4. Which of the following contributed to the more relaxed incorporation procedures of modern times?
a. The idea that incorporation is a by-product of the people’s right to associate, not a gift from the
state.
b. The move from mercantilist thinking to a belief in Benjamin Franklin’s invisible hand.
c. The idea that incorporation is a gift from the state.
d. The thought that laissez-faire is a losing proposition..
5. In Citizens United v. Federal Elections Commission, the U.S. Supreme Court
a. defined the free-speech rights of corporations for the first time.
b. defended the first Amendment right of corporations to spend money to support political candidates
they favor.
c. said that banking procedures are to be regulated by the Securities and Exchange Commission.
d. said that states should be permitted to distinguish between the rights of individuals and the rights of
corporations.
6. A common point of contention about corporations is
a. corporate punishment is no different from individual punishment.
b. modern corporations no longer utilize a CID structure.
c. philosophers and business theorists disagree whether corporations are moral agents.
d. if corporations are moral agents, then this relieves individual human beings of any moral
responsibility.
7. Milton Friedman argues that
a. corporations today should adopt a broader view of their social responsibilities than they have in the
past.
b. corporate officials have a social responsibility that goes beyond serving the interests of their

stockholders.
c. strict governmental controls are necessary if society is to maximize its overall economic well-being.
d. a business’s only social responsibility is to maximize profits within the rules of the game.
8. Which of the following do advocates of the broader view of corporate social responsibility believe?
a. Corporations should not internalize their externalities.
b. Moral responsibility arises from social power.
c. Corporations have moral obligations to consumers, to employees, to suppliers and contractors, to
the surrounding community, and to society at large.
d. The moral contract between business and society has changed since the 19th century.
9. Some argue for the narrow view of corporate social responsibility on the ground that managers
have a fiduciary responsibility to maximize the profits of their shareholders. As discussed in Chapter
5, one problem with this argument is that
a. companies do not usually have a clear chain of command.
b. promises don’t override all our other obligations.
c. managers don’t always know how to maximize profits.
d. stockholders don’t expect company managers to make money for them.
10. Which of the following is one of the three arguments in favor of narrow corporate social
responsibility discussed in Chapter 5?
a. business-can-handle-it c. society-lacks-the-expertise
b. let-government-do-it d. visible-hand
11. One of the three important “limits to what the law can do” discussed by Christopher Stone is
a. laws are passed before there is any real problem to worry about.
b. consumers don’t want further legal regulation.
c. designing effective regulations is difficult.
d. regulators are often “bought off” by corporations.
12. Kenneth Arrow discussed two important situations in which profit maximization can be socially
inefficient. One of these occurs when
a. there is an imbalance of knowledge between buyer and seller.
b. business would be an “inept custodian” of public values.
c. firms are unwilling or simply refuse to maximize profits.
d. corporate culture promotes dysfunctional social relations.
13. Externalities are
a. always positive, never negative.
b. a blessing in disguise in inflationary times.
c. an inevitable by-product of social responsibility.
d. unintended side-effects.
14. Milton Snoeyenbos argues that
a. settled economic life requires purely selfish behavior.
b. with ethical codes, there’s no need for taxes, laws, or regulations as a way of controlling corporate
behavior.
c. Corporate moral codes can make it more reasonable to expect employees to behave ethically.
d. to be viable, ethical codes need not be widely accepted or part of corporate culture.

15. The best statement concerning corporations is
a. corporations don’t need moral codes.
b. corporate culture refers to the cultural activities sponsored by the company for its employees.
c. pollution caused by corporations isn’t an externality.
d. corporate culture can be both explicit and implicit.
16. Momentum for the corporate organization of business really gained momentum after which war?
a. Revolutionary War c. Civil War
b. French and Indian War d. World War I
17. The debate over corporate moral agency hinges on which issue?
a. Corporate decision c. Individual responsibility
b. Corporate punishment d. Corporate fit
18. The idea that corporations are moral agents
a. is accepted by many people and companies without hesitation.
b. has not been accepted by the courts.
c. has not been accepted by any major corporation.
d. is supported by the fiduciary relationship between management and shareholders.
19. The “rules of the game” for corporate work are intended to
a. let the games begin. c. destroy the competition.
b. promote open and free competition. d. make business fun.
20. Milton Friedman’s perspective is that the only social responsibility of a business is to
a. provide social benefit for the messes.
b. give jobs to the hard workers.
c. pay taxes to keep the government operating.
d. make money for its owners.
21. Those with a broader view concerning business obligations believe that with power comes
a. more power. c. too many limits .
b. more money. d. social responsibility.
22. Melvin Anshen suggests that there is a relationship between business and society which he
termed as
a. “share the wealth.”
b. “the rich get richer and the poor get poorer.”
c. “social contract.”
d. “one for all and all for one.”
23. Most Americans believe a corporation’s top obligation is to its
a. nation. b. stockholders. c. community. d. employees.
24. In the corporate world, the board of directors will typically
a. rubber stamp the policies and recommendations of the management.
b. write the policies and procedures.
c. be there just for show.
d. hire and fire people for key management positions.

25. Adam Smith proposed that in our pursuit of economic interests we are led by
a. our gut instincts. c. the trends of the economy.
b. an invisible hand to promote general good. d. the moral compass within each of us.
TRUE/FALSE
1. Most business observers agree with Berle and Means that, because stock ownership in large
corporations is so dispersed, actual control of the corporation has passed to management.
2. Internal or external corporate responsibility audits can help improve a corporation’s “corporate
culture.”
3. Corporate internal decision (CID) structures amount to established procedures for accomplishing
specific goals.
4. “Limited liability” means that members of a corporation are financially liable for corporate debts only
up to the extent of their investments.
5. The invisible-hand argument against broadening corporate responsibility says that business’s
appetite for profit should be controlled by the hand of the government.
6. Milton Friedman argues that business has a responsibility to provide employment, refrain from
polluting, and eliminate discrimination, even when it’s not profitable to do so.
7. Externalities are the unintended negative (or in some cases positive) consequences that an
economic transaction between two parties can have on some third party.
8. The business-can’t-handle-it argument is an argument in favor of a broad view of corporate
responsibility.
9. Legally a corporation is a thing that can endure beyond the natural lives of its members and that
has incorporators who may sue and be sued as a unit and who are able to consign part of their
property to the corporation for ventures of limited liability.
10. The case of Citizens United v. Federal Election Commission ruled that corporations could spend
money to support political candidates.
11. Manuel Velasquez claims that the corporate internal decision structure of a corporation shows that
a corporation can have both intentions and intentionality.
12. According to Milton Friedman, business has no social responsibilities other than to maximize
profits so long as it follows the rules of the game.
13. Adherents of the broader view of corporate responsibility claim that modern business is intimately
integrated with the rest of society and that, as a result, although society expects business to pursue
its economic interests, business has other responsibilities as well.
14. According to Melvin Anshen, the case for a broad view of corporate responsibility can be
defended on the basis of there always being a kind of social contract existing between business and
society.
15. Externalities give us a reason to support the narrow view of corporate responsibility.

16. According to Keith Davis, in addition to considering potential profitability, a business must weigh
the long-range social costs of its activities as well. A business should act only if the overall benefit to
society is positive.
17. According to law professor Christopher D. Stone, the relationship between corporate management
and its shareholders is identical with the relationship between you and an investment adviser.
18. John Kenneth Galbraith rejects the assumption that Smith’s invisible hand will solve all social and
economic problems.
19. The idea that corporations will impose their values on us supports one of the arguments for the
narrow view of corporate social responsibility.
20. In his essay “Social Responsibility and Economic Efficiency,” Kenneth Arrow has argued that
corporations only have a responsibility to maximize shareholder profits.
21. An effective professional or business moral code—as well as the public’s awareness of this
code—is never good for business.
22. It is never profitable for corporations to acknowledge that business should be conducted to make
a positive contribution to society rather than just make a profit.
23. According to proponents of broadening corporate responsibility, corporations should welcome the
outside opinions of society as a whole, local communities, customers, suppliers, employees,
managers, and stockholders.
24. According to Kenneth Arrow, trust and confidence are highly overrated in business.
25. A corporate moral code should set reasonable goals and subgoals, with an eye on blunting
unethical pressures on subordinates.
SHORT ANSWER
1. What is a corporation (or limited-liability company) and how does it differ from partnerships and
other forms of business association? What are the different kinds of corporations?
2. Briefly sketch the evolution of corporations.
3. What is the problem of “vanishing individual responsibility?”
4. Briefly explain Milton Friedman’s view of social responsibility.
5. Explain the relevance of the concept of a fiduciary relationship to the debate over corporate social
responsibility.
10
ESSAY
1. Describe the ethical challenges that Yahoo faces in the China market.
2. What is a moral issue raised by how drug companies are testing drugs? Apply a normative theory
of ethics to this moral issue to explain why some people would think the drug companies are doing
something immoral.

3. What has Yahoo done that could help countries violate human rights? Apply a normative theory of
ethics to this moral issue to explain why Yahoo did something immoral.
4. Is Levi Strauss really hurting the people of Costa Rica by opening the operation there? List the pros
and cons.
5. Does a company like Levi Strauss have an obligation to keep a plant open in the United States if it
can be more profitable going to a foreign country? Share your reasoning.
If you were the owner of a company, would your perspective be any different?
Chapter 6—Consumers
MULTIPLE CHOICE
1. The case of MacPherson v. Buick Motor Car in 1916 changed product liability law. As a result of it,
the courts
a. permitted consumers to sue manufacturers with whom they had no contractual relationships.
b. adopted the principle of caveat emptor.
c. permitted consumers to sue the retailer from whom they had purchased the product.
d. adopted the principle of strict liability.
2. According to the legal doctrine of strict product liability,
a. the producer of a product is responsible for any injury the consumer suffers.
b. consumers must assume all risk whenever they buy a product.
c. product liability presupposes negligence by more than one party.
d. a manufacturer need not be negligent to be held liable for a defective product.
3. Which statement is accurate in its description of consumer protection?
a. The Consumer Product Safety Commission has the power to order recalls.
b. Statistics show that, in fact, safety regulations rarely succeed in increasing safety.
c. Critics agree that the cost of safety regulations and product recalls are negligible.
d. Safety regulations permit people to choose to save money by purchasing riskier (but less
expensive) products.
4. Legal paternalism is the doctrine that the law
a. may justifiably restrict the freedom of the individual for his or her own good.
b. may justifiably forbid lawsuits against those who act paternalistically.
c. should encourage business to develop a paternal sense of responsibility for consumers.
d. should only restrict people’s freedom in order to protect other people.
5. “Puffery” is an example of which of the following deceptive or misleading advertising techniques?
a. ambiguity c. psychological appeals
b. exaggeration d. concealed facts
6. For years Bayer aspirin advertised that it contained “the ingredient doctors recommend most.” This
is an example of
a. ambiguity. c. exaggeration.
b. psychological appeals. d. concealed facts.
7. The case of FTC v. Standard Education was important in the legal transition
a. toward the principle of caveat emptor.

b. toward something like the ignorant consumer standard.
c. toward the reasonable-person standard.
d. that removed power from the Federal Trade Commission (FTC).
8. In deciding whether an ad is deceptive, today the FTC basically follows
a. the reasonable consumer standard. c. a “modified” ignorant-consumer standard.
b. the ignorant/gullible consumer standard. d. none of the above.
9. Harvard business professor Theodore Levitt has
a. drawn an analogy between advertising and art.
b. proven the possibility of effective subliminal advertising.
c. argued that the process of production today creates the very wants it then satisfies.
d. invented the concept of “puffery”.
10. According to Galbraith’s “dependence effect,”
a. production depends upon wants.
b. advertising depends on the wants of the consumer.
c. producers use advertising to shape consumer wants.
d. advertising depends on consumerism.
11. Advertising
a. makes the market more efficient.
b. maximizes consumer well-being (thanks to the invisible hand).
c. can’t be restricted without violating the moral rights of advertisers.
d. subsidizes the media.
12. Critics of advertising generally agree that
a. advertising rarely gives consumers much useful information.
b. brand loyalty increases price competition.
c. restrictions on advertising violate the moral rights of advertisers.
d. advertising can only influence us if we want it to.
13. Caveat emptor means
a. strict product liability
b. due care
c. let the buyer beware
d. the customer and manufacturer meet as equals
14. Before the case of MacPherson v. Buick Motor Car in 1916, the law based a manufacturer’s
liability for injuries due to a defective product on
a. the principle of strict liability.
b. the direct contractual relationship between the producer and the consumer.
c. the principle of the reasonable person.
d. whether or not the manufacturer exercised due care.
15. Due care is
a. based on the principle of caveat emptor.
b. based on the principle “let the buyer beware.”
c. the idea that consumers and sellers do not meet as equals and that consumer’s interests are

particularly vulnerable to being harmed by the manufacturer.
d. based on the principle of absolute liability.
16. Which statement is true from an ethical perspective?
a. The argument for strict liability is basically utilitarian.
b. Strict liability is identical with absolute liability.
c. The concept of due care is identical with that of caveat emptor.
d. The argument for due care is basically Kantian.
17. In 1972 Congress created one of the most important agencies for regulating product safety. This
agency is the
a. Securities and Exchange Commission. c. Fair Packaging and Labeling Commission.
b. Federal Drug Administration Agency. d. Consumer Product Safety Commission.
18. Every year ___________ of Americans require medical treatment from product related accidents.
a. tens of thousands c. millions
b. hundreds d. hundreds of thousands
19. People generally speak of two kinds of warranties. What are these two kinds of warranties?
a. express and implied c. limited and unlimited
b. positive and negative d. legal and moral
20. Which of the following is an example of price gouging?
a. Selling World Series Tickets for $300.
b. New York hotels that doubled or tripled their prices in the aftermath of the September 11, 2001,
attacks.
c. Having to pay above the seller’s original asking price for a home.
d. Increasing the price of lawn movers in the spring and summer.
21. The consumer’s main source of product information is
a. testimonials of other customers. c. word of mouth.
b. billboards. d. the label and package.
22. The goal of advertising is
a. to persuade people to purchase the product.
b. to provide information about goods and services.
c. to provide information about prices.
d. to subsidize the media.
23. Terms like “can be,” “as much as,” and “help,” are examples of
a. concealment of facts. c. ambiguity.
b. truth in advertising. d. consumer confidence.
24. The terms “best, finest, and most” are examples of
a. puffery. c. truth in advertising.
b. psychological appeals. d. trust building statements.
25. Statistically, there is strong evidence that exposure to television advertising is strongly associated
with
a. criminal behavior.
b. obesity in children under twelve.

c. low ethical sensitivity in children under ten.
d. liberal attitudes in children under nine.
TRUE/FALSE
1. Statistics indicate that the faith consumers place in manufacturers is often misplaced.
2. Strict product liability is the doctrine that the seller of a product has legal responsibilities to
compensate the user of that product for injuries suffered due to a defective aspect of the product,
even if the seller has not been negligent in permitting that defect to exist.
3. In the 1960 case Greenman v. Yuba PowerProducts, injured consumers were awarded damages
based on their proving that the manufacturers of the defective products were negligent.
4. In his books The Affluent Society and The New Industrial State, John Kenneth Galbraith argues
that consumer wants are never created by advertising or sophisticated sales strategies.
5. Defenders of advertising claim that, despite criticisms, advertising enjoys protection under the first
Amendment as a form of speech.
6. The doctrine of caveat emptor means that the law may be justifiably used to restrict the freedom of
individuals for their own good.
7. Deceptive advertising is always legal because we have freedom of speech.
8. The Federal Trade Commission (FTC) was established in 1914 to protect consumers against
deceptive advertising.
9. Subliminal advertising is advertising that supposedly communicates at a level beneath our
conscious awareness.
10. Anti-paternalism is often defended on the assumption that individuals know their own interests
better than anyone else, and that they are fully informed and able to advance those interests.
11. Economists can prove, if we grant them enough assumptions, that free-market buying and selling
lead to optimal results. One of those assumptions is that everyone has full and complete information,
on the basis of which they then buy and sell.
12. When advertisers conceal facts, they suppress information that is unfavorable to their products.
13. A psychological appeal is one that aims to persuade by appealing primarily to reason and not to
human emotional needs.
14. The FTC now follows the reasonable-person standard in matters of advertising, sales and
marketing.
15. Due care is the idea that consumers and sellers do not meet as equals and that the consumer’s
interests are particularly vulnerable to being harmed by the manufacturer, who has knowledge and
expertise the consumer does not have.
16. Before the case of MacPherson v. Buick Motor Car in 1916, injured consumers could only recover
damages from the retailer of the defective product.
17. Legal paternalism is the doctrine that the law should not be used to restrict the freedom of
individuals for their own good.

18. One decisive case in the legal transition away from the reasonable-person standard in matters of
advertising, sales and marketing was FTC v. Standard Education.
19. The FTC now follows the “modified” gullible consumer standard, and it protects consumers from
ads that mislead significant numbers of people.
20. Business’s responsibility for understanding and providing for consumer needs derives from the
fact that citizen-consumers are dependent on business to satisfy their needs.
21. Puffery is illegal.
22. Strict liability is the same thing as absolute liability.
23. The controversy over legal paternalism pits the values of individual freedom and autonomy
against social welfare.
24. Businesses are never legally responsible for accidents that occur exclusively as a result of
product misuse.
25. “Weasel words” are words used to evade or retreat from a direct or forthright statement.
SHORT ANSWER
1. What is the importance of the 1916 case of MacPherson v. Buick Motor Car?
2. What is due care?
3. What is the doctrine of caveat emptor?
4. What is the importance of Greenman v. Yuba Power Products?
5. What is an argument for strict product liability?
6. Regulations often benefit consumers, but not always. Name one reason that regulations can
sometimes harm consumers.
7. Give an example of manipulative pricing.
8. Give an example of labeling or packaging that would be deceptive or misleading.
9. Give an example of deceptive ambiguity in advertising.
10. What is subliminal advertising?
ESSAY
1. Defend the position that advertisers must use imagination and artistic content to address human
needs.
2. Defend the position that advertising manipulates human needs and can create artificial ones.
3. Why then is there concern about the ethics of advertising? If the consumer is responsible to make
the decision, is there anything to justify restricting the advertiser? Justify and explain your answers.
4. Should cigarette sales be legal? Justify your answer and consider possible objections to it.
5. Thomas L. Carlson argues that there are four rules that must be followed for a sale to be ethical.
What are they, and what objections can be raised against them?

Chapter 7—The Environment
MULTIPLE CHOICE
1. Which of the following is true concerning our environment today?
a. the Clean Air Act of 1970 has had no beneficial effects
b. animal waste from factory farms is good for the environment
c. the “greenhouse effect” is basically media hype
d. polluted air is a health risk
2. An ecosystem
a. should never be tampered with. c. can be upset by human behavior.
b. can survive any human intervention. d. is independent of all other ecosystems.
3. The “tragedy of the commons” is
a. the lack of a commons—a common place where people can come together.
b. the failure to appreciate what we have in common with other species.
c. that cost-benefit analysis involves value judgments that we do not share in common.
d. that individual pursuit of self-interest can sometimes make everyone worse off.
4. Some environmental regulations (like forbidding the burning of coal in cities) benefit each and every
one of us because the air we all breather is cleaner. If an individual ignores the regulation and burns
coal, while others obey the regulation, then he or she
a. violates our right to a livable environment. c. displays an ignorance of ecology.
b. is being a free rider. d. creates an externality.
5. The moral theorist William T. Blackstone claims that the right to a livable environment
a. would solve the problem of how to conserve resources.
b. prevents the use of government regulation to control the actions of business.
c. is a fundamental human right.
d. implies that non-human animals have no genuine moral rights.
6. Cost-benefit analysis
a. is influenced by value judgments. c. values costs over benefits.
b. considers only short-term effects. d. is a value-free social-scientific approach.
7. Which environmental statement is true?
a. Tropical forests are the earth’s richest, oldest, and most complex ecosystems.
b. Because of technological breakthroughs, people living in developed countries put less strain on the
environment than do people in poorer countries.
c. There are only about 1000 species of animals left in the world.
d. The United States consumes only its proportional share of the world’s irreplaceable natural
resources.
8. Concerning future generations,
a. all philosophers today reject the idea that future people have rights
b. utilitarianism dictates a radical reduction in population growth
c. future people have a right to be born
d. the social and environmental policies we adopt can affect who is born in the future

9. According to the anthropocentric (or human-oriented) ethic of Baxter and others,
a. environmental preservation is inherently valuable.
b. the Grand Canyon is valuable only because people care about it.
c. we have a strong, almost absolute obligation to preserve species from extinction.
d. future people have no interests that we need to respect now.
e. nature has value in and of itself, apart from human beings.
10. Which of the following is true of factory farms?
a. They are smaller these days than they used to be.
b. The people who run them are brutal.
c. Contrary to the critics, the animals in them rarely suffer.
d. They permit the mass production of meat at low prices.
11. According to Shaw and Barry, utilitarians
a. focus on human well-being and ignore animal welfare.
b. oppose animal experimentation in principle.
c. should include nonhuman animal pleasures and pains in the overall utilitarian calculus.
d. are likely to favor factory farming.
12. Which of the following is true of a regulatory approach to environmental problems?
a. It proceeds on a case-by-case basis, dealing with each company’s specific circumstances.
b. It gives companies an incentive to do more than the minimum required by law.
c. It requires the EPA or other body to determine the most effective, feasible pollution-control
technology for each different industry.
d. It involves the use of pricing mechanisms.
13. Animal manure
a. is not available in sufficient quantities to replenish agricultural land.
b. is a large source of pollution.
c. helps counteract the “greenhouse effect”.
d. is potentially more dangerous than nuclear power.
14. “Pollution permits” are an example of which of the following methods of achieving our
environmental goals?
a. pricing mechanisms c. a laissez-faire approach
b. government subsidies d. regulations
15. In consideration for the obligation to others,
a. we have no genuine moral obligations to future generations.
b. future people have a right to be born.
c. the U.S. uses more than its proportional share of the world’s resources.
d. environmental protection is always a static trade-off, with a fixed economic price to be paid for the
gains we want.
16. One truth about factory farms is
a. they rarely inflict any genuine suffering on animals.
b. most animals we eat are from them.
c. they are necessary to feed the world.
d. they are run by brutal people.

17. According to the philosopher Joel Feinberg,
a. future generations of people have a right to be born.
b. future generations have no moral rights.
c. we have no duties to future generations.
d. the rights of future generations are contingent upon those people coming into existence.
18. William F. Baxter addresses environmental ethics by noting
a. the best ethical position to adopt on environmental issues is a naturalistic position.
b. non-human animals have intrinsic value.
c. judgments about environmental problems ought to be people-oriented.
d. damage to geological “marvels” is inherently wrong and should be prevented.
19. The philosopher Tom Regan
a. claims that no impartial morally sensitive person could approve of the treatment of animals in
factory farms if he or she knew what was going on.
b. argues against the use of governmental regulations to control the actions of businesses.
c. believes that the FTC should be abolished.
d. denies that non-human animals have any moral rights.
20. According to Holmes Rolston III,
a. naturalistic ethics ought to be abandoned.
b. some natural objects are morally considerable in their own right, apart from human interests.
c. all moral rights are derived from the interests of human beings.
d. nature has no value apart from human beings.
21. A decade after wolves were reintroduced to Yellowstone Park, their presence was discovered to
a. not change anything. c. have changed the behavior of elk.
b. have stabilized their own population. d. be disruptive.
22. Business has considered the environment to be
a. a scarce commodity. c. a limited supply.
b. free and nearly limitless. d. costly.
23. An assessment of costs and benefits inevitably involves
a. facts. c. false opinions.
b. monetary costs only. d. value judgments and factual uncertainties
24. Which of the following is a drawback to the regulatory approach?
a. regulation can take away an industry’s incentive to do more than the minimum
b. regulation is an incentive to an industry to do more than the minimum
c. regulation does not apply to all equally
d. does not require polluters to use the strongest most feasible means of pollution control.
25. A moral vegetarian
a. rejects eating meat based on moral grounds.
b. only eats animal that were raised humanely.
c. does not believe animals suffer.
d. the pleasure we get from eating a hamburger justifies the price the animals pay.
TRUE/FALSE

1. The new discipline of “ecological economics” calculates the value of an ecosystem, not in terms of
what people are willing to pay for it, but in terms of what it would cost to provide the benefits and
services that the ecosystem now furnishes us.
2. Regulation is always the most effective way to allocate the costs of environmental protection.
3. Advocates of a “naturalistic ethic” believe that penguins are important only because people like
them.
4. Cost-benefit analyses of rival environmental policies inevitably involve making value judgments
about nonmonetary costs and benefits.
5. The word “ecology” refers to the science of the interrelationships among organisms and their
environment.
6. The word “ecosystem” refers to a total ecological community, both living and non-living.
7. The disparity between private industrial costs and public social costs is what economists call an
“internality.”
8. Cost-benefit analysis is a device used to determine whether it’s worthwhile to incur a particular
cost.
9. Tampering with the ecosystem always has injurious effects.
10. When it comes to the protecting animal interests, the United States is far ahead of Europe.
11. According to Jeremy Bentham, the question is not whether animals can feel pain, but whether
they can talk and reason.
12. Advocates of a naturalistic ethic contend that some natural objects are morally considerable in
their own right, apart from human interests.
13. Moral vegetarians are people who reject the eating of meat on moral grounds.
14. According to William F. Baxter, we ought to respect the “balance of nature” and “preserve the
environment” even if doing so brings no benefit to human beings.
15. A moral of Garrett Hardin’s parable “The Tragedy of the Commons” is that there can be a
difference between the private costs and the social costs of a business activity.
16. William T. Blackstone rejects the idea that each person has a human right to a livable
environment on the grounds that it is technically infeasible.
17. Three approaches have gained the most attention when it comes to achieving our environmental
goals: the use of regulations, incentives, and pricing mechanisms.
18. According to Joel Feinberg, we can predict various interests of future generations.
19. Thanks to the EPA, the federal government long ago eliminated the problem of potentially harmful
pesticides and other chemical residues in food.
20. According to Cambridge University biologist Andrew Balmford, the loss of nature’s services is
usually outweighed by the benefits of development.
21. An ordinary example of an ecosystem is a pond.

22. One of the attitudes prevalent in business that has led to increased environmental problems is the
tendency to view the natural world as a free and unlimited good.
23. The international fishing industry as it exists today gives us good reason to reject the moral of
Garrett Hardin’s “Parable of the Commons.”
24. The rising affluence of people in the United States has meant a corresponding decrease in
pollution and its attendant environmental problems in the United States.
25. Any equitable solution to the problem of who should pay the bill for environmental cleanup should
take into account responsibility as well as benefit.
SHORT ANSWER
1. What is the meaning of “ecology”?
2. What’s an “externality”? Give an environmental example of an externality.
3. Explain a cost-benefit analysis, and how is it relevant to environmental issues?
4. What’s a “free rider”?
5. Briefly describe the two popular answers to the question of who should pay the costs of
environmental protections and restorations.
ESSAY
1. Is it appropriate to have a “valley of death” as described in Case 7.2? If you worked for one of the
factories how would you justify the fumes? If you take an environmental view, how would confront the
problem?
2. Is it a moral right or privilege for human beings to live in a clean environment? Defend your answer.
3. Does that fact that McDonald’s gave in to public opinion mean that all businesses should do the
same? Is there ever a time that a business can tell environmentalists that they will not abide by the
regulations or requests? Defend your answers.
4. Are there any differences between environment ethics for humans and animals? Defend your
answers.
5. Would you propose an incentive based program to challenge companies to reduce their
environmental liability? Give an example of how this can be done and whether it could ever be
effective. Defend your answer.
Chapter 8—The Workplace (1): Basic Issues
MULTIPLE CHOICE
1. According to David Ewing, two factors explain the absence of civil liberties and the prevalence of
authoritarianism in the workplace. Which of the following is one of them?
a. discriminatory employment practices due to strict constructionist interpretations of the Constitution
b. the rise of personnel engineering and professional management
c. the common law doctrine of eminent domain
d. employer resistance to unionization

2. According to common law, to legally dismiss an employee, an employer
a. cannot have bad motives. c. must have good cause.
b. is obligated not to discriminate. d. need have no reason at all.
3. Which of the following is an accurate statement about employment law in the workplace?
a. It’s illegal to fire workers because of union membership.
b. Courts at all levels and in all states now agree that employees cannot be dismissed without just
cause.
c. The civil liberties of employees have to be restricted for corporations to run efficiently.
d. More and more companies are moving toward “employment at will”.
4. Austin Fagothey and Milton Gonsalves believe a direct strike is justified
a. when it is motivated by revenge. c. when it is a last resort.
b. when workers are coerced into striking. d. under no conditions.
5. Groups of 18th century skilled artisans formed secret societies for two basic reasons. Which of the
following is one of those reasons?
a. to equalize their relationship with their employers
b. to distinguish themselves from carpenters and shoemakers
c. to gain control of the German government
d. to avoid having to set minimal standards for their crafts
6. Choose the most accurate statement concerning the workplace:
a. If wages conform with the law, they are fair wages.
b. Employers have no obligation to dismiss workers as painlessly as possible.
c. An employer’s financial capabilities affect what constitutes a fair wage scale for that employer’s
employees.
d. All instances of nepotism raise serious moral concerns.
7. According to David Ewing,
a. the corporate invasion of employees’ civil rights is rampant.
b. sympathetic strikes ought to be made illegal.
c. employers have the right to fill the positions of striking workers with other workers.
d. seniority ought not be a factor in making transfers or promotions.
8. To be successful any test used by a corporation must be
a. sound.
b. valid.
c. created outside the corporation using the test.
d. one that can be used by any organization for any position.
9. The Wagner Act of 1935
a. established the Food and Drug Administration.
b. prohibits employers from interfering with employees trying to organize unions.
c. guaranteed employers the right of refusing to bargain with union representatives.
d. guaranteed the right to work and outlawed union shops.
10. Unions employ two kinds of boycotts to enforce their demands. These two kinds of boycotts are
a. positive and negative. c. active and passive.
b. corporate and private. d. primary and secondary.

11. Which statement is true about the hiring and employment process?
a. A job description permits employers to rely on the preferences of their customers as a reason for
discriminatory employment practices.
b. A job specification describes the qualifications an employee needs, such as skills, educational
experience, appearance, and physical attributes.
c. According to common law, unless there is an explicit contractual provision to the contrary, every
employment is employment “at will.”
d. In validating job specifications, a firm lists all pertinent details about a job, including its duties,
responsibilities, working conditions, and physical requirements.
12. Griggs v. Duke Power Company, which prohibits
a. tests given to employees or applicants to have inconsistent results.
b. tests given to employees or applicants from being invalid.
c. tests given to employees or applicants from being unreliable.
d. employers from requiring a high school education as a prerequisite for employment or promotion
without demonstrable evidence that the associated skills relate directly to job performance.
13. Which of the following is a correct statement about union activities?
a. A sympathetic strike occurs when workers who have no particular grievance of their own and who
may or may not have the same employer decide to strike in support of others.
b. A corporate campaign occurs when people refuse to patronize companies that handle products of
struck companies.
c. The 1947 Taft-Hartley Act forbids individual states from outlawing union shops.
d. Labor historians generally consider the American Federation of Labor (AFL) the first truly national
trade union.
14. Since Congress passed the Americans with Disabilities Act in 1994,
a. all disabled persons must be hired.
b. employers must make “reasonable accommodations” for disabled workers.
c. employees must try to “undo” their disabilities.
d. employers must be careful to “screen” out disabled persons.
15. Choose the factual statement concerning wages:
a. An employer’s financial capabilities are irrelevant to the question of fair wages.
b. A fair wage is whatever an employee is willing to accept.
c. Extrinsic, non-job-related considerations are often relevant to setting fair wages.
d. A fair wage presupposes a fair work contract.
16. Employers have the right to fire an employee who performs inadequately, but they should do so
a. as painlessly as possible. c. in a public display so all can learn.
b. with vengeance. d. in humiliation.
17. Fair personnel policies and decisions must be based on criteria that are clear, job related, and
a. partial toward friends. c. ignore personality.
b. equally applied. d. minimize nepotism.
18. The hiring process needs to include screening, testing, and
a. safety awareness. c. interviewing.
b. eliminating candidates. d. job descriptions.

19. Which of these is a valid reason for not hiring a potential employee?
a. The person is overqualified.
b. There’s a gap in the person’s unemployment history.
c. The person dresses poorly.
d. The person has a lack of experience.
20. Tests are designed to measure the applicants’ skills in verbal, quantitative, and
a. ethical skills. b. empathy skills. c. logical skills. d. social skills.
21. In the interview process, the interview should avoid rudeness, coarseness, condescension, and
a. giddiness. b. hostility. c. sternness. d. questions.
22. The English philosopher Francis Bacon (1561–1626) called conscious and unconscious biases
and stereotypes
a. “plagues of interviewing.” c. “the best tools.”
b. “idols of the mind.” d. “mind benders.”
23. The key moral ideal in promotions is
a. loyalty. b. likeability. c. intelligence. d. fairness.
24. Of the four types of discharge, firing
a. results from an employee’s poor
performance—that is, from his or her failure to fulfill expectations.
b. is for-cause dismissal—the result of employee theft, gross insubordination, release of proprietary
information, and so on.
c. usually refers to the temporary unemployment experienced by hourly employees and implies that
they are “subject to recall.”
d. designates the permanent elimination of a job as a result of workforce reduction, plant closing, or
departmental consolidation.
25. In union terms, a direct strike occurs
a. when an organized body of workers withholds its labor to force the employer to comply with its
demands.
b. when union members and their supporters refuse to buy products from a company being struck.
c. when workers who have no particular grievance of their own and who may or may not have the
same employer decide to strike in support of others.
d. when people refuse to patronize companies that handle products of struck companies.
TRUE/FALSE
1. It is morally right for employers to dismiss employees for any reason.
2. Due process requires specific and systematic means for workers to appeal discharge or disciplinary
decisions.
3. Inbreeding is the practice of showing favoritism to relatives and close friends.
4. A corporate campaign occurs when an organized body of workers withholds its labor to force an
employer to comply with its demands.

5. According to common law, unless there is an explicit contractual provision to the contrary, every
employment is employment at will and either side is free to terminate it at any time without advance
notice or reason.
6. Just cause requires that reasons for discipline or discharge relate directly to job performance.
7. The Wagner Act of 1935 permitted firing workers because of union membership or union activities.
8. In a handful of American cities local ordinances prohibit discrimination against those who are short
or overweight.
9. A job description describes the qualifications an employee needs, such as skills, educational
experience, appearance, and physical attributes.
10. The express purpose of a boycott is the same as a strike — to hurt the employer and strengthen
the union’s bargaining position.
11. When weighing the decisions to dismiss employees, companies need to remember that
employment affects families and communities, not just individuals.
12. The reliability of a test refers to the quality of exhibiting a reasonable consistency in results
obtained.
13. Inbreeding refers to longevity on a job or with a firm.
14. Nepotism is the practice of promoting exclusively from within the firm.
15. Labor historians generally consider the Knights of Labor (K of L), established in 1869, as the first
truly national trade union.
16. A primary boycott occurs when people refuse to patronize companies that handle products of
struck companies.
17. According to Shaw and Barry, a workplace environment in which employees are treated fairly and
their inherent dignity respected is compatible with a firm’s business goals.
18. From the beginning, unions have been driven by an attempt to protect workers from abuses of
power at the hands of employers.
19. If employees who don’t join the union get the same benefits as union members, this raises a
question of fairness.
20. Job performance and the fairness of the work contract are relevant to the issue of fair wages.
21. Sympathetic strikes are ineffective.
22. The express purpose of a strike is the same as that of a boycott — to hurt the employer or
company financially and strengthen the union’s bargaining position.
23. An individual is usually an equal with the employer in the negotiation process.
24. When most people fire another employee, they do it with great joy.
25. One of the chief concerns of nepotism is the disregard of managerial responsibilities to the
organization and of fairness to other employees.
SHORT ANSWER

1. According to David Ewing, two historical factors lie behind the absence of civil liberties and the
prevalence of authoritarianism in the workplace. What are these two factors?
2. What is the importance of the Wagner Act of 1935?
3. What is the difference between a “job description” and a “job specification”?
4. Sometimes the screening process unfairly excludes certain applicants. Give two examples.
5. Explain these concepts: seniority, inbreeding, and nepotism.
6. What does “just cause” require in situations of employee discipline or discharge? What does “due
process” require?
7. Name three criteria that is relevant to the fairness of tests used for hiring employees.
8. How did the passage of the National Labor Relations Act in 1935 advance the cause of unionism?
9. What is the importance of the Taft-Hartley Act?
10. What’s the difference between a direct strike and a sympathetic strike?
ESSAY
1. How are unions relevant to business ethics? Justify your answer.
2. Should legislation be passed to require that some or all employees be paid a living wage? Justify
your answer.
3. How is “just cause” and “due process” relevant to business ethics? Justify your answer.
4. What are the key principles of ethical interviewing? Justify your answer.
5. Do you agree with Austin Fagothey and Milton A. Gonsalves that strikes should only be given as a
last result? Justify your answer.
Chapter 9—The Workplace (2): Today’s Challenges
MULTIPLE CHOICE
1. Privacy
a. is an absolute value.
b. must be respected if we are to function as complete, self-governing agents.
c. is something that employees today don’t care about.
d. is guaranteed by Article 3, section 3, of the Constitution.
2. The right to privacy of employees
a. takes priority over other moral considerations.
b. is clearly and unambiguously spelled out by the law.
c. may conflict with an organization’s legitimate interests.
d. has to be given up in an era of global competition.
3. When it comes to obtaining information about employees, a key concept is
a. informed consent. c. economic efficiency.
b. paternalism. d. positive externalities.

4. Which of the following is true?
a. a company is never permitted to test for legal drugs
b. drugs can’t harm employee performance
c. business writers agree that drug testing is more cost effective than voluntary drug assistance
programs
d. media sensationalism and political posturing can get in the way of sensible answers to the drug
problem
5. One key questionable premise underlying personality tests is
a. they sometimes screen out potentially creative or individualistic employees.
b. they presuppose that all employees can be validly placed in a small number of categories.
c. they can help determine job applicants’ areas of adequacy and inadequacy.
d. that all individuals can usefully and validly be placed into a relatively small number of categories of
personality types and character traits.
6. Polygraph tests
a. are extraordinarily accurate contrary to what the critics say.
b. can produce false positives.
c. cannot reveal with certainty whether a person is or is not telling the truth.
d. are totally reliable because lying always triggers an involuntary response that truth telling does not.
7. The Hawthorne effect shows that
a. quality control circles are important.
b. middle managers are affected by the satisfaction and dissatisfaction of the workers they supervise.
c. attention and recognition can enhance worker productivity and motivation.
d. trade-offs have to be made between productivity and quality of work life.
8. Businesses cite several reasons for using polygraphs to detect lying. Which of the following is one
of those reasons?
a. the polygraph is a fast and economical way to verify the information provided by a job applicant.
b. polygraph tests cannot be beaten.
c. the polygraph can reveal with certainty that a person is or is not telling the truth.
d. the polygraph allows companies to increase the number of audits.
9. Used properly, personality tests serve two purposes in the work place. Which of the following is one
of those purposes?
a. Personality tests help screen applicants for jobs by indicating areas of adequacy and inadequacy.
b. Personality tests help to determine whether an applicant is a drug user.
c. Personality tests help determine how little the business has to pay an applicant if hired.
d. Personality tests help determine if an applicant will be willing to work for low pay.
10. Which statement has the proper perspective about drug testing?
a. Due process need not be followed by a business implementing a drug-testing program for its
employees.
b. The government has always opposed testing Federal employees for cocaine and other illicit drugs.
c. Drug testing can only be defensible when it is really pertinent to employee performance and when
there is a lot at stake.
d. Informed consent need not be observed by a business implementing a drug testing program for its
employees.

11. Douglas McGregor rejects Theory X, which holds that
a. when explained properly, everyone will favor drug-testing programs.
b. workers essentially dislike work and will do everything they can to avoid it.
c. workers basically like work and view it as something natural and potentially enjoyable.
d. sexual harassment is a form of discrimination.
12. An early 1970s government study (“Work in America”) identified three chief sources of worker
dissatisfaction. Which of the following is one of those sources?
a. industry’s preoccupation with quality, not quantity
b. the rigidity of rules and regulations
c. the relatively small size of most U.S. corporations
d. mandatory drug testing programs used by many U.S. corporations
13. A fact about job satisfaction is
a. longevity does not correlate with job satisfaction.
b. the U.S. leads the world in the provision of childcare.
c. a lack of job satisfaction can create mental health problems.
d. worker participation and improved QWL always boost productivity.
14. Out of these four, which one is the only correct statement concerning OSHA?
a. Critics call OSHA a “toothless tiger”.
b. OSHA regulates the shifts people work.
c. OSHA says few accidents are caused by sleep deprivation and fatigue.
d. OSHA states the key to worker safety is improved engineering.
15. The most accurate statement about workplace safety is:
a. workers are often unaware of the hazards they face on the job
b. employees, not their employers, are responsible for creating a safe workplace
c. in an average year, 150 workers are killed on the job
d. according to experts, industrial accidents “just happen”
16. “Corporate in-fighting,” “management power struggles,” “maneuvering and politics and power
grabbing,” and “Machiavellian intrigues” are all phrases H. Ross Perot uses to describe
a. the reality of family life today. c. the reality of the lunch room.
b. the reality of corporate life today. d. the reality of the drive into work.
17. Forty-three thousand workers each year are
a. killed on the job. c. injured on the job.
b. laid off. d. fall asleep on the job.
18. The proper approach to promote safety is to change the “hidden culture” to
a. pay employees more. c. hides injuries.
b. be proactively oriented toward safety. d. refuse to talk openly about safety.
19. The most common reason that people leave their jobs is
a. low wages.
b. too much overtime.
c. a poor relationship with their immediate supervisor.
d. lousy benefits.

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