1. What distinguishes insider trading from other types of trading?

a. The trading is based on non-public information

b. The trading is completed by professionals

c. The trading is profitable for all involved

d. The trading involves stocks, bonds, and securities

2. Friedman argued that social spending by corporations is a form of taxation on _________.

a. the public

b. the employees

c. the shareholders

d. the board of directors

3. What is the key similarity between the exploitation and redistribution rationales for a minimum wage?

a. They are both based on morality.

b. They both show that a minimum wage effectively promotes justice.

c. They both focus on the possibility of coercion.

d. They are both economic arguments.

4. According to the “classical view,” companies ________.

a. have a responsibility to their environment

b. can promote CSR without sacrificing profitability

c. are not essentially different from other types of organizations

d. exist for reasons other than promoting social responsibility

5. An effective corporate ethics program should include.

a. standards that have been communicated to all levels

b. oversight given to a few individuals

c. training in all of the relevant laws

d. reporting of all procedures to the public

6. Luis, a manager for a local branch of a multinational corporation, agrees to hire an official’s son for an assistant manager position in order to gain approval of a necessary permit. This situation is an example of:

a. Nepotism

b. Entrepreneurship

c. Bribery

d. Capital flight

7. Kristen is injured in a car accident when the brakes fail on her car. She sues the car manufacturer, not the brake manufacturer, and the courts rule in her favor. This situation is an example of which theory of product safety?

a. Contractual

b. Strict liability

c. Due care

d. Kantian

8. According to Friedman, a corporation is only obligated to serve the interests of one group. Who of the following best fits that description:

a. Gina, a farmer who supplies ingredients to the corporation.

b. Sam, a customer who buys the corporation’s products.

c. Luis, a documented immigrant who works for the corporation.

d. Martin, an investor who owns 500 shares of a corporation.

9. Trina’s Ts is a multinational corporation that has subsidiaries throughout the world. One subsidiary sells cotton to another subsidiary, both located in a developing nation. What is the ethical concern with this example of transfer pricing?

a. Consumer protection

b. Employment practices

c. Tax avoidance

d. Environmental preservation

10. Amanda is a shareholder for ProBrakes International. How does she and other shareholders ensure that the managers of ProBrakes act with the goal of turning a maximum profit?

a. The shareholders help with publicity and marketing to ensure profit.

b. The shareholders control manger’s incentives through the board of directors.

c. The shareholders help develop public policies that support profitability.

d. The shareholders are given incentives when the company does turn a profit.