LAW & ETHICS IN THE BUSINESS ENVIRONMENT 6e
Test Bank
Revisions for the 7th edition by Eric D. Yordy, The W. A. Franke College of Business
at Northern Arizona University
CHAPTER 1
Law, Ethics, Business: An Introduction
Questions
1. Select the best definition of ethics:
a. a fairly clear cut set of guides for decision making.
b. a set of relatively unclear principles regarding what we must do.
c. a set of relatively unclear principles regarding what we should do.
d. religious views about the world.
ANSWER: B PAGE: 1
2. Laws must be static and unyielding in order to provide stability for a society.
a. True
b. False
ANSWER: B PAGE: 1
3. Choose the statement regarding duty to rescue that is false:
a. There is no general duty to rescue an individual.
b. One basis for not imposing individual rescue liability is: An individual should
have a right of freedom of action, privacy and personal autonomy not to intervene
and perform rescue.
c. Under a liberal–communitarian approach, citizens owe a duty to the state to
rescue other citizens based on reciprocal rights and duties.
, d. When one taunts another person who then puts themselves in danger in response
to the teasing, the teaser has a duty to rescue the other.
ANSWER: D PAGE: 3-8
4. All of the following are considered exceptions to the general rule that there is no duty
to rescue except:
a. Contract – lifeguards, for example, have signed contracts agreeing to rescue
people in exchange for pay and benefits.
b. Witnessing an accident – this creates a duty to step in and help the injured
c. Child abuse- statutes in nearly all states require that one report suspected child
abuse.
d. Endangerment – if one puts another in danger, then he/she is obligated to
rescue that person.
ANSWER: B Page 8-9
5. Which of the following views on outsourcing would be consistent with the free
market ethics approach advocated by Milton Friedman?
a. Outsourcing is detrimental to the economy because it limits profitability.
b. Outsourcing decreases efficiency and productivity.
c. Outsourcing enhances competitiveness, modernization, and bigger market
opportunities.
d. Automating processes and replacing workers is unethical since it does not serve a
greater good.
ANSWER: C PAGE: 11
6. Which of the following statements best illustrates the view of “utilitarianism”?
I. From each according to his abilities, to each according to his needs.
, II. The risk reasonably to be perceived defines the duty to be obeyed and
risks imports relation; it is risk to another or to others within the range of
apprehension.
III. An action is right when maximizing welfare and total well-being.
IV. Individuals should pursue his or her own self-interest, even at the expense
of others.
a. I only
b. III only
c. I and II
d. I, II, and III
ANSWER: B PAGE: 14
7. The best example of a source for virtue ethics for a business is
a. newspapers articles about the corporation.
b. the corporate mission statement.
c. the documentation in human resources justifying the hiring of new staff.
d. the resumes of the members of the board of directors and the officers.
ANSWER: B Page 22-23
8. The Ethic of Care is
a. A set of rules that explain how to prioritize those people affected by a decision
so that a utilitarian analysis can be done successfully.
b. A set of universal principles, which applied evenly to all decisions will result
in fairness and equity in ethical decisions.
, c. The idea that we should all make decisions under the assumption that we
don’t know our station in life, that we could be the person most negatively
impacted by the decision.
d. A set of principles that encourage decision makers to look at human
relationships as a primary motivator for a decision.
ANSWER: D Page 24-25
9. Assuming a business ethical dilemma, which statement best illustrates Gilligan
approach suggested in her theory of “The Ethics of Care”?
a. individual rights and justice for all
b. applies only to women and not men
c. care and responsibility to others
d. obedience to independent moral rules or duties
ANSWER: C PAGE: 25
10. Which of the following statements is INCORRECT regarding the rights of
shareholders?
I. voting power on major issues and ownership in a portion of the company
II. right to transfer ownership and dividend entitlement
III. hire and fire management and select and appoint a chief executive
a. I and II
b. I, II, and III
c. I only
d. III only
ANSWER: D PAGE: 30
Test Bank
Revisions for the 7th edition by Eric D. Yordy, The W. A. Franke College of Business
at Northern Arizona University
CHAPTER 1
Law, Ethics, Business: An Introduction
Questions
1. Select the best definition of ethics:
a. a fairly clear cut set of guides for decision making.
b. a set of relatively unclear principles regarding what we must do.
c. a set of relatively unclear principles regarding what we should do.
d. religious views about the world.
ANSWER: B PAGE: 1
2. Laws must be static and unyielding in order to provide stability for a society.
a. True
b. False
ANSWER: B PAGE: 1
3. Choose the statement regarding duty to rescue that is false:
a. There is no general duty to rescue an individual.
b. One basis for not imposing individual rescue liability is: An individual should
have a right of freedom of action, privacy and personal autonomy not to intervene
and perform rescue.
c. Under a liberal–communitarian approach, citizens owe a duty to the state to
rescue other citizens based on reciprocal rights and duties.
, d. When one taunts another person who then puts themselves in danger in response
to the teasing, the teaser has a duty to rescue the other.
ANSWER: D PAGE: 3-8
4. All of the following are considered exceptions to the general rule that there is no duty
to rescue except:
a. Contract – lifeguards, for example, have signed contracts agreeing to rescue
people in exchange for pay and benefits.
b. Witnessing an accident – this creates a duty to step in and help the injured
c. Child abuse- statutes in nearly all states require that one report suspected child
abuse.
d. Endangerment – if one puts another in danger, then he/she is obligated to
rescue that person.
ANSWER: B Page 8-9
5. Which of the following views on outsourcing would be consistent with the free
market ethics approach advocated by Milton Friedman?
a. Outsourcing is detrimental to the economy because it limits profitability.
b. Outsourcing decreases efficiency and productivity.
c. Outsourcing enhances competitiveness, modernization, and bigger market
opportunities.
d. Automating processes and replacing workers is unethical since it does not serve a
greater good.
ANSWER: C PAGE: 11
6. Which of the following statements best illustrates the view of “utilitarianism”?
I. From each according to his abilities, to each according to his needs.
, II. The risk reasonably to be perceived defines the duty to be obeyed and
risks imports relation; it is risk to another or to others within the range of
apprehension.
III. An action is right when maximizing welfare and total well-being.
IV. Individuals should pursue his or her own self-interest, even at the expense
of others.
a. I only
b. III only
c. I and II
d. I, II, and III
ANSWER: B PAGE: 14
7. The best example of a source for virtue ethics for a business is
a. newspapers articles about the corporation.
b. the corporate mission statement.
c. the documentation in human resources justifying the hiring of new staff.
d. the resumes of the members of the board of directors and the officers.
ANSWER: B Page 22-23
8. The Ethic of Care is
a. A set of rules that explain how to prioritize those people affected by a decision
so that a utilitarian analysis can be done successfully.
b. A set of universal principles, which applied evenly to all decisions will result
in fairness and equity in ethical decisions.
, c. The idea that we should all make decisions under the assumption that we
don’t know our station in life, that we could be the person most negatively
impacted by the decision.
d. A set of principles that encourage decision makers to look at human
relationships as a primary motivator for a decision.
ANSWER: D Page 24-25
9. Assuming a business ethical dilemma, which statement best illustrates Gilligan
approach suggested in her theory of “The Ethics of Care”?
a. individual rights and justice for all
b. applies only to women and not men
c. care and responsibility to others
d. obedience to independent moral rules or duties
ANSWER: C PAGE: 25
10. Which of the following statements is INCORRECT regarding the rights of
shareholders?
I. voting power on major issues and ownership in a portion of the company
II. right to transfer ownership and dividend entitlement
III. hire and fire management and select and appoint a chief executive
a. I and II
b. I, II, and III
c. I only
d. III only
ANSWER: D PAGE: 30
