Exam for Chapter 1

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* Question 1
10 out of 10 points
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| A group of young professionals were discussing the relationship between law and business. Adam argues that law primarily benefits the owners of businesses at the expense of workers and customers, while Beth takes the opposite position - that law primarily benefits the individual employees, customers and others, at the expense of the owners of businesses. Charlie posits that all parties are better off because of the presence of law, while David asserts that law is not a significant factor in the conduct of business. Based on your text, which person's view is most accurate? Answer | | | | | Selected Answer:| C. Charlie|

Correct Answer:| C. Charlie|
Response Feedback: | Correct! Charlie's view is most accurate, as expressed in the text discussion in "Law and Public Policy" and "Law and the Value Chain" on pages 4-10.|
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* Question 2
10 out of 10 points
| |
| Which of the following is NOT true about law?Answer | | | | | Selected Answer:| C. Neither of the above is true|
Correct Answer:| C. Neither of the above is true|
Response Feedback: | The correct answer is "C", it is NOT true that law should be demonstrably fair to all concerned, nor is it true that law should accurately reflect the beliefs of the majority of citizens.This is discussed in the lecture for Week 1. What's "fair" is a personal judgment. For example, some believe that it is fair for tax law to have a higher tax rate for people who earn more, while some believe that the rate should be the same for all. Majority opinion is also not a precept of the law, as discussed in the example of "Brown v. Board of Education" which desegregated the public schools.|

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* Question 3
10 out of 10 points
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| When faced with the possibility of wrongdoing, which of the following is most appropriate?Answer | | | | | Selected Answer:| D. Conduct the preliminary investigation, then if additional information substantiates the rumors and an internal investigation is to be conducted, bring in outside experts.| Correct Answer:| D. Conduct the preliminary investigation, then if additional information substantiates the rumors and an internal investigation is to be conducted, bring in outside experts.| Response Feedback: | Correct. Conduct the preliminary investigation, then if additional information substantiates the rumors, then if an internal investigation is to be conducted, bring in outside experts. As noted in the discussion "The Responsible Manager" on pages 14-15, there are a number of guidelines that should be followed.|

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* Question 4
10 out of 10 points
| |
| Which of the following is the best example of an ethical act?Answer | | | | | Selected Answer:| C. Considering the impact on and perspectives of all significant stakeholders before making a decision.| Correct Answer:| C. Considering the impact on and perspectives of all significant stakeholders before making a decision.| Response Feedback: | Answer "C" is correct. Considering the impact on and perspectives of all significant stakeholders before making a decision. A 'living wage' may help the workers but cause extra expense to consumers, causing harm to them. It's not entirely ethical to make a decision without considering the impact on them. Answer B is not correct, because believing that something is right doesn't make it ethical. Hitler thought it was ethical to kill all Jews, but that didn't make it ethical. Review Lecture 1 for more on this topic.|

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* Question 5
0 out of 10 points
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| If a proposed action is legal but does not maximize shareholder value, should the action be taken anyway?Answer | | | | | Selected Answer:| D. No.|
Correct Answer:| B. Take the action if it would unethical to refrain from taking the action.| Response Feedback: | The correct answer is "B". Take the action if it would...
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