Business Ethics Exam Questions and Answers

Business Ethics Exam Questions and Answers:- Chap 8
16. Which of the following is a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders?
a. Procuring
b. Branding
c. Marketing
d. Copywriting
Answer: c

  1. Which of the following is one of the “Four Ps” of marketing?
    a. Purpose
    b. Planning
    c. Promotion
    d. People
    Answer: c
  2. The _____ ethical tradition would see a simple situation of an agreement for an exchange between two parties as upholding respect for individuals by treating them as autonomous agents capable of pursuing their own ends.
    a. role-based
    b. rights-based
    c. rules-based
    d. strategy-based
    Answer: b
  3. The _____ ethical tradition would take the two parties’ agreement as evidence that both are better off than they were prior to the exchange and thus conclude that overall happiness has been increased by any exchange freely entered into.
    a. utilitarian
    b. virtual
    c. Kantian
    d. deontological
    Answer: a
  4. The simple situation in which two parties come together and freely agree to an exchange is ethically legitimate only prima facie because:
    a. investigation proves that a simple exchange does not involve unethical situations.
    b. a simple exchange involves the consent of both parties involved, which leaves no room for unethical acts.
    c. certain conditions must be met before it can be concluded that autonomy has been respected and mutual benefit has been achieved.
    d. exchange occurs on mutual consent and for mutual benefit, parties get involved in an exchange only if they see their benefit.
    Answer: c
  5. While approaching an ethical issue in marketing, the rights-based tradition would:
    a. ask to what degree the participants are respected as free and autonomous agents rather than treated simply as means to the end of making a sale.
    b. calculate the benefits and costs of each exchange.
    c. attempt to find out about other values that are affected by the exchange.
    d. want to know the degree to which the transaction provided actual as opposed to merely apparent benefits for each participant.
    Answer: a
  6. While approaching an ethical issue in marketing, the utilitarian tradition would want to know:
    a. the degree to which individuals freely participate in an exchange.
    b. the degree to which the transaction provided actual as opposed to merely apparent benefits.
    c. about other values that are affected by the exchange.
    d. about the personal characters of the parties that are involved in the exchange.
    Answer: b
  7. A consumer’s consent to purchase a product is not informed if that consumer is:
    a. unwilling to listen to the product details from the sales person.
    b. injured after using the product and filed a product liability suit.
    c. asked to buy a product without a warranty.
    d. being misled or deceived about the product.
    Answer: d
  8. Greater consumption is likely to lead to unhappiness, a condition termed _____.
    a. affluenza
    b. caveat emptor
    c. influenza
    d. insomnia
    Answer: a
  9. The legal doctrine of strict liability is ethically controversial because:
    a. it assumes informed consent of the buyer and therefore it is assumed to be ethically legitimate.
    b. it allows consumers to assume that products are safe for use.
    c. it holds that consumer demand depends upon what producers sell.
    d. it holds a business accountable for paying damages whether or not it was at fault.
    Answer: d
  10. Identify the approach that assumes that every purchase involves the informed consent of the buyer and is ethically legitimate.
    a. Res ipsa loquitur approach
    b. Prima facie approach
    c. Caveat emptor approach
    d. Caveat venditor approach
    Answer: c
  11. In selling a product, a business offers tacit assurances that the product is reasonably suitable for its purpose. The law refers to this as the:
    a. doctrine of caveat emptor.
    b. implied warranty of merchantability.
    c. doctrine of caveat lector.
    d. implied warranty of productivity.
    Answer: b
  12. Which of the following statements is correct about the implied warranty of merchantability?
    a. It refers to the caveat emptor approach.
    b. This standard shifts the burden of proof from producers to consumers.
    c. Most courts allow a business to completely disclaim the implied warranty of merchantability.
    d. Many businesses issue a disclaimer of liability, or offer an expressed and limited warranty to limit their liability.
    Answer: d
  13. The implied warranty of merchantability shifts the burden of proof from:
    a. producers to consumers.
    b. producers to suppliers.
    c. consumers to producers.
    d. suppliers to consumers.
    Answer: c
  14. A business will seek to limit its liability by explicitly disowning any promise or warranty by:
    a. using the caveat venditor principle.
    b. issuing a disclaimer of liability.
    c. completely disclaiming the implied warranty of merchantability.
    d. denying responsibility for the behavior of its suppliers.
    Answer: b
  15. How did the use of an implied warranty of merchantability solve a set of problems with the contract law approach to product liability?
    a. Consumers do not need complex contracts in order to protect themselves from all possible harms that products might cause.
    b. The burden of proof has shifted from producers to consumers as consumers are allowed to assume that products are safe for ordinary use.
    c. It has forced businesses to issue a disclaimer of liability and offer limited warranties to limit its liability.
    d. Buyers have the responsibility to look out for their own interests and protect their own safety when buying a product.
    Answer: a
  16. Which of the following is true about tort law?
    a. Tort law holds that the only duties that a person owes are those that have been explicitly promised to another party.
    b. Tort law holds manufacturers accountable in cases when consumers are injured by products and no one is at fault.
    c. Tort law holds a principal responsible for the actions of an agent when that agent is acting in the ordinary course of his or her duties to the principal.
    d. Tort law holds that people do not owe other people any general duties, if they have not voluntarily assumed them.
    Answer: b
  17. Which of the following statements is true about negligence?
    a. It is not a central component of tort law.
    b. One can be negligent by doing something that one should not.
    c. One cannot be held negligent by failing to do something that one should have done.
    d. It excludes acts of both commission and omission.
    Answer: b
  18. Which of the following is true about strict product liability?
    a. The United States has adopted clear strict liability standards.
    b. It holds that the government must pay consumers where neither the producer nor the consumer is at fault.
    c. It insures that society creates a strong incentive for business to produce safer goods and services by holding business strictly liable for any harm their products cause.
    d. It is the same as negligence, and it suggests that holding business liable for harms caused due to negligence provides an incentive to better protect products in the future.
    Answer: c
  19. Society creates a strong incentive for businesses to produce safer goods and services by holding them responsible for any harm their products cause. This claim supports the:
    a. strict product liability standard.
    b. actual foreseeability standard.
    c. reasonable person standard.
    d. consent and informed decision standard.
    Answer: a
  20. Which of the following statements is true about manipulation?
    a. It involves total control of direction or management.
    b. A person cannot manipulate someone without deception.
    c. It implies guiding people’s behavior with their conscious understanding. d. To manipulate something is to guide or direct its behavior.
    Answer: d
  21. Which of the following ethical traditions would have the strongest objections to manipulation?
    a. Economic
    b. Virtue-based
    c. Principle-based
    d. Utilitarian
    Answer: c
  22. Which of the following statements about manipulation would a strong believer of the principle-based ethical tradition most likely support?
    a. Cases of paternalistic manipulation, in which someone is manipulated for their own good, are acceptable.
    b. Manipulation executed without deception is acceptable.
    c. Even unsuccessful manipulations are guilty of ethical wrong.
    d. The ethical consequence of manipulation depends on the personal characteristics of the manipulator.
    Answer: c
  23. Marketing practices targeted at elderly populations for goods such as supplemental health insurance, funerals etc. are subject to criticism because:
    a. that population is vulnerable.
    b. interest gained on such investments are not highly profitable.
    c. they target the considered and rational desires of the consumers.
    d. they do not abide by the principles of welfare economics.
    Answer: a
  24. According to economist John Kenneth Galbraith, advertising and marketing were creating the very consumer demand that production then aimed to satisfy. The assertion that consumer demand relies upon what producers have to sell is termed:
    a. the Hawthorne effect.
    b. the dependence effect.
    c. the reverse channel effect.
    d. the supplemental effect.
    Answer: b
  25. Identify one of the implications of the “dependence effect.”
    a. Unless a seller explicitly warrants a product as safe, buyers are liable for any harm they suffer.
    b. Advertising and marketing create consumer wants that support the entire economy.
    c. The court’s ruling on product liability cases is dependent on the extent of manipulation.
    d. By creating consumer wants, advertising and other marketing practices violate consumer autonomy.
    Answer: d
  26. Which of the following do advertising and other marketing practices violate by creating consumer wants?
    a. Right to free speech
    b. Consumer autonomy
    c. Right to privacy
    d. Consumer demand
    Answer: b
  27. How does advertising distort the economy?
    a. It manipulates prices for promotion to gain a foothold in a market.
    b. It results in supply becoming a function of demand.
    c. It is not able to create nonautonomous desires.
    d. It creates irrational and trivial consumer wants.
    Answer: d
  28. Consumer vulnerability occurs when:
    a. a person has an impaired ability to make an informed consent to the market exchange.
    b. a person is susceptible to injuries from falls and medical emergencies.
    c. the consumer is treated as an end in itself.
    d. the law of supply and demand is reversed.
    Answer: a
  29. Which of the following is an example of consumer vulnerability?
    a. Elderly people susceptible to expensive health care bills
    b. Poor people susceptible to bankruptcy
    c. Children susceptible to any bright, attractive items of no practical value
    d. Single women walking alone at night susceptible to sexual assault
    Answer: c
  30. General vulnerability occurs when:
    a. a person has an impaired ability to make an informed consent to the market exchange.
    b. a person is susceptible to some specific physical, psychological, or financial harm.
    c. children are shown commercials in and around schools.
    d. people are susceptible to the harm of not satisfying their consumer desires and/or losing their money.
    Answer: b
  31. Consumers are vulnerable when they are not aware that they are subject to a marketing campaign. This type of campaign is called:
    a. imminent marketing.
    b. word-of-mouth marketing.
    c. network marketing.
    d. undercover marketing.
    Answer: d
  32. Which of the following statements is true about stealth marketing?
    a. It occurs when consumers are aware that they are subject to a marketing campaign.
    b. It refers to situations where consumers are subject to directed commercial activity without their knowledge.
    c. It occurs when consumers pay little or no attention to billboards while speeding past a highway.
    d. It is not an intentional effort to hide the true marketing element of the interaction.
    Answer: b
  33. Marketing experts consider stealth marketing extraordinarily effective because:
    a. a consumer does not question the message as she might challenge a traditional advertising campaign.
    b. the consumer’s guard is not down while accepting the message.
    c. consumers do not see the communication as
    too personal and often tend to trust an advertisement or other marketing material much more than they would trust the communicator.
    d. consumers seek out the communicator’s vested interest.
    Answer: a
  34. An employer is held liable for damages caused by an accident involving an employee driving the company car on company business. Identify the law underlying this decision.
    a. The doctrine of caveat emptor
    b. The doctrine of respondent superior
    c. Implied warranty of merchantability
    d. The doctrine of caveat lector
    Answer: b
  35. UniCo—a multinational corporation that specializes in designing, developing, and selling consumer electronics—outsources manufacturing products to a third-world country company. Human rights activists have criticized UniCo for operating inhumane sweatshops at the manufacturing plants to gain profits. Although UniCo. is not directly liable to the labor exploitation, it threatens to pull out its business from the contracted company if the laborers are not provided with dignified wages and good working conditions. Which of the following responsibilities did the company fulfill in this scenario?
    a. Caveat emptor
    b. Implied merchantability
    c. Respondent superior
    d. Strict liability
    Answer: c
  36. Which of the following is an often overlooked aspect of advertising?
    a. Pricing function
    b. Evaluation function
    c. Educational function
    d. Watchdog function
    Answer: c
  37. Identify the practice of promoting a product by misleading consumers about the environmentally beneficial aspects of the product.
    a. Greenwashing
    b. Redlining
    c. Gentrification
    d. Greenskinning
    Answer: a
  38. Labeling products with such terms as “environmentally friendly,” “natural,” “eco,” “energy efficient,” “biodegradable” and the like can help promote products that have little or no environmental benefits. This practice is known as:
    a. greenskinning.
    b. redlining.
    c. gentrification.
    d. greenwashing.
    Answer: d
  39. Which of the following refers to the growing marketing practice of taking back one’s products after their useful life?
    a. Reintermediation
    b. Reverse channels
    c. Disintermediation
    d. Forward integration
    Answer: b

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