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| 1 | |
The free market, classical, theory of corporate social responsibility relies on utilitarianism and the concepts o individual rights to freedom and property for its ethical justification. |
| | A) | TRUE |
| | B) | FALSE |
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| 2 | |
To use a company's resources for a project that does not contribute to maximizing profits is sometimes acceptable and even sometimes required under the classical model of corporate social responsibility. |
| | A) | TRUE |
| | B) | FALSE |
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| 3 | |
If the costs of externalities like air pollution, ground water contamination and depletion, soil erosion, and nuclear waste disposal are borne by parties who are not involved in the exchange between buyer and seller, the exchange price does not represent an equilibrium between costs and benefits. |
| | A) | TRUE |
| | B) | FALSE |
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| 4 | |
There is no reason to believe that ad hoc attempts to repair market failures—like determining shadow prices for unpriced social goods, or by exempting social goods from the market, or by use of the law to address social goods that are unattainable through individual choice—are socially inadequate. |
| | A) | TRUE |
| | B) | FALSE |
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| 5 | |
According to the private property defense of the classical model of corporate social responsibility, any use of a corporation's resources for any purpose other than maximizing profits is a violation of the owners' property rights, amounts to theft. |
| | A) | TRUE |
| | B) | FALSE |
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| 6 | |
Bowie's Kantian model of corporate social responsibility obliges managers to do no harm, but they must also be prepared at times to do some good or prevent some harm. |
| | A) | TRUE |
| | B) | FALSE |
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| 7 | |
The stakeholder theory of corporate social responsibility is totally incompatible with utilitarian ethical theory because the stakeholder concept requires balancing the interests of all the parties affected by business decisions. |
| | A) | TRUE |
| | B) | FALSE |
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| 8 | |
A wider interpretation of the meaning of a stakeholder as any affected party places an impossible burden on managers who would have to account for everyone who might be affected by a business decision. |
| | A) | TRUE |
| | B) | FALSE |
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| 9 | |
The free market theory provides the rationale for the responsibility of managers to make as much money for their stockholders as possible. |
| | A) | TRUE |
| | B) | FALSE |
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| 10 | |
Greater efficiency means that more beneficial consequences can result from each spending decision, in turn attracting more investors whose resources can then be used to increase business. |
| | A) | TRUE |
| | B) | FALSE |
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| 11 | |
Market failures occur in a variety of situations in which the pursuit of profit will not result in a net increase in consumer satisfaction because in these situations markets fail to do what they were designed to do. |
| | A) | TRUE |
| | B) | FALSE |
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| 12 | |
Prisoners' dilemma cases are examples of situations in which cooperation does not have a more optimal outcome than competition. |
| | A) | TRUE |
| | B) | FALSE |
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| 13 | |
We learn about market failures and thereby prevent harms in the future only by sacrificing the first generation as a means for gaining this information. |
| | A) | TRUE |
| | B) | FALSE |
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| 14 | |
Milton Friedman did not recognize that there are limits to the pursuit of profits. |
| | A) | TRUE |
| | B) | FALSE |
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