1. Desmond, a stockbroker for a large firm, sells shares in a mutual fund by describing the large returns earned when the fund was investing in a different mix of companies. He omits this information and also does not discuss the potential risks of investing in the fund. This situation is an example of:
a. Churning
b. Diversification
c. Deception
d. Unsuitability
2. Orange, a clothing manufacturer, has a factory in Honduras. Orange pays the local legal minimum wage to its employees, but there are many protests. What is the likely cause for the protests against this practice?
a. A legal minimum wage is discriminatory toward women.
b. A legal minimum wage attracts children as employees.
c. A legal minimum wage may not be locally appropriate.
d. A legal minimum wage is not a living wage.
3. Lisa fails to make her sales goals for the year due to extensive absences and a lack of work ethic. According to the Model Employment Termination Act, Lisa’s conduct is an example of
a. Due process
b. Good faith
c. Due diligence
d. Good cause
4. A wildlife refuge advertises its mission during the local news, hoping to generate more donations to support the animals. This situation is an example of
a. Social advertising
b. Irrational persuasion
c. Native advertising
d. Audience profiling
4. After a set of toy jewelry is found to contain lead, the Consumer Product Safety Commission issues a recall and bans the sale of the product in the United States. This situation is an example of which ethical concept regarding marketing?
a. Freedom
b. Justice
c. Well-being
d. Fairness
5. Sunburst coffee offers competitive wages and has found that this reduces employee turnover, thus maximizing profits. It has employed the exact number of people necessary to make the most money. This situation is an example of wages
a. Distributed out of proportion to one’s contribution.
b. Set at the market-clearing price.
c. That are determined by the market and therefore are just.
d. That exceed the marginal product of labor.
6. Fun Toys 4 U and Castle Toys are competitors. The CEO’s of both companies meet and agree to sell their products in different areas of the country to avoid competition. This situation is an example of:
a. Resale price maintenance
b. Price-fixing
c. Predatory pricing
d. Price discrimination
7. Apple has been accused of designing the IPhone
a. Without regard for environmental harm
b. Without concern for its safety
c. With planned obsolescence
d. With the intention of deceiving customers
8. Although bonds are a better match for her client’s investment strategy, Frannie convinces the client to buy stocks. This situation is an example of:
a. Deception
b. Churning
c. Unsuitability
d. Fraud