Full file at ://fratstock.eu/sample/Test-Bank-Dynamic-Business... · 2017. 5. 8. · 24. What do...
Transcript of Full file at ://fratstock.eu/sample/Test-Bank-Dynamic-Business... · 2017. 5. 8. · 24. What do...
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-1
Chapter 02
Business Ethics and White-Collar Crime
True / False Questions
1. Ethical conversation is primarily about finding the one and only right thing to do.
True False
2. The social responsibility of business consists only of the expectations employees have of
employers.
True False
3. Business ethics is the application of ethics to the special problems and opportunities
experienced by business people.
True False
4. In some countries businesses must pay bribes in order to receive legitimate supplies.
True False
5. The definition of stakeholder is the same as the definition of shareholder.
True False
6. The community in which a firm operates would not be considered a stakeholder of the
firm.
True False
7. In an ethical analysis using the WPH Framework referenced in the text, owners are the
most important stakeholders and should receive the greatest consideration in decision
making.
True False
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-2
8. The primary purpose of criminal law is to compensate a victim.
True False
9. Under our criminal laws that exist today, white-collar crime is not punishable by
imprisonment.
True False
10. Congress amended the Foreign Corrupt Practices Act to conform to the Anti-Bribery
Convention adopted by the Organization for Economic Cooperation and Development.
True False
11. In general, China punishes embezzlement less severely than the U.S.
True False
12. Under the common law, a corporation could not be considered a criminal because it was
not an actual person and, thus, did not have a mind.
True False
13. Under current law, corporations cannot be held criminally accountable for strict-liability
offenses.
True False
14. Ethical relativism is a theory of ethics that denies the existence of objective moral
standards.
True False
15. Situational ethics is the same thing as ethical relativism.
True False
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-3
16. Absolutism is also referred to as ethical fundamentalism.
True False
17. Consequentialism provides a rigid set of rules to follow regardless of the situation.
True False
18. Rule utililtarianism tells business managers to examine all the potential actions in each
situation and choose the action that yields the greatest amount of pleasure over pain for all
involved.
True False
19. Utilitarianism is a form of consequentialism.
True False
20. Deontology consists of acting on the basis of the recognition that certain actions are right
or wrong, regardless of their consequences.
True False
Multiple Choice Questions
21. Which of the following is the study and practice of decisions about what is good, or
right?
A. Morals
B. Ethics
C. Consequences
D. Law
E. Business
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-4
22. A local Chamber of Commerce plans a seminar on "the social responsibility of business."
What does that term reference?
A. The responsibility of business to make profit for shareholders.
B. The responsibility of business to have annual meetings.
C. The expectations that the community imposes on firms doing business inside its borders.
D. The expectations of employees regarding wage rates.
E. The expectations of management in regard to adequate utility resources.
23. As pointed out in the text section "Business Ethics and Italian Taxes" which of the
following is true regarding the application of ethics in a global context?
A. While ethical considerations may vary, the enforcement of laws remains the same from
country to country.
B. Ethical considerations vary from country to country as do practices of law enforcement.
C. Ethical considerations do not vary from country to country although rules for law
enforcement do vary.
D. The Italian government seeks to discuss taxes after returns are filed because
underestimating profits is rarely a problem there.
E. The Italian government seeks to discuss taxes before returns are filed because
underestimating profits is rarely a problem there.
24. What do the letters "WPH" mean in reference to the "WPH Framework for Business
Ethics" discussed in the text?
A. Who, Purpose, and How
B. When, Plan, and How
C. Why, Procedure, and Hope
D. Where, Plan, and Hope
E. Where, Procedure, and How
25. Which of the following are stakeholders of a business?
A. Shareholders
B. Employees
C. Customers
D. Management
E. All the above
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-5
26. Which of the following is true under the WPH process of ethical decision making?
A. The interest of management is ranked higher than that of employees when decisions are
made.
B. The interest of owners is ranked higher than that of both employees and management when
decisions are made.
C. When decisions are made, the interest of the community as a whole is considered last.
D. The interest of management is ranked higher than that of employees when decisions are
made, but the interest of owners is ranked higher than the interest of any group.
E. None of the above are true.
27. What are some examples of purpose in the WPH process of ethical decision making?
A. Freedom
B. Security
C. Efficiency
D. Freedom and security, but not efficiency
E. Freedom, security and efficiency
28. Which of the following is a part of the "how" in the WPH process of decision making?
A. Public disclosure
B. Customer satisfaction
C. Profit maximization
D. Whistle-blowing
E. All the above
29. Positive abstractions that capture our sense of what is good or desirable are called
______.
A. Ethical ideas
B. Values
C. Conscience demands
D. Desirable principles
E. Action goals
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-6
30. The idea that we should interact with other people in a manner consistent with the manner
in which we would like for them to interact with us is called ______.
A. The Equalization Rule
B. The Ethical Realization Rule
C. The Silver Rule
D. The Golden Rule
E. The Ten Commandments Rule
31. The "public disclosure" test for ethical behavior is sometimes referred to as the ______
test.
A. Television
B. Powell
C. Self-conscious
D. Golden
E. Primary
32. The ______ for ethical behavior seeks consideration of what the world would be like if a
decision is copied by everyone else.
A. Golden Rule
B. Universalization test
C. Public Disclosure
D. Relevant Disclosure
E. World Rule
33. Which of the following is true regarding the universalization test for ethical behavior?
A. It is the same as the public disclosure test.
B. It has been discredited.
C. It is the same as the golden rule test.
D. It has been enacted into law by federal law.
E. None of the above.
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-7
34. Which of the following is the term that describes wrongful behavior in a criminal action?
A. Mens rea.
B. Actus reus.
C. Res judicata.
D. Stare decisis.
E. None of the above.
35. Which of the following is a term describing the wrongful state of mind needed for a
criminal action?
A. Mens rea.
B. Actus reus.
C. Res judicata.
D. Stare decisis.
E. None of the above
36. Strict liability is a term used to describe which of the following:
A. Liability without fault.
B. Negligence.
C. Actus reus.
D. Intentional wrongdoing.
E. Recklessness.
37. Which of the following is an example of the imposition of strict liability?
A. A robber pulls a gun to rob a bank teller.
B. A burglar breaks into a home to steal jewelry.
C. A business sells cigarettes to a minor.
D. A minor shoplifts in a department store.
E. An adult shoplifts in a department store.
38. Which of the following is punishable by imprisonment for more than one year or death?
A. Misdemeanor.
B. Felony.
C. Petty offenses.
D. Tort offenses.
E. Any business related crime.
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-8
39. Which of the following are less serious crimes punishable by fines or imprisonment of
less than one year?
A. Misdemeanor.
B. Felony.
C. Petty offenses.
D. Tort offenses.
E. Any business related crime
40. Which of the following are minor offenses usually punishable by a jail sentence of less
than six months or a small fine with an example being violation of a building code?
A. Insignificant offenses.
B. Felony.
C. Petty offenses.
D. Tort offenses.
E. Any business related crime
41. Which of the following serves to combat bribery of foreign officials?
A. The Foreign Official Bribery Act
B. The International Bribery Prohibition Act
C. The Fair Business Act
D. The International Fair Business Practices Act
E. The Foreign Corrupt Practices Act
42. Which of the following is the making of threats for the purpose of obtaining money or
property?
A. Bribery
B. Criminal Fraud
C. Extortion
D. Both A and C
E. Importation
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-9
43. Which of the following is the making of an entry into the books of a bank or corporation
that is designed to represent the existence of funds that do not exist?
A. False entries
B. Defalcation
C. False pretenses
D. Ponzi scheme
E. Pretexting
44. Which of the following is a false document or sign of existence used to perpetrate fraud,
such as making counterfeit money?
A. False entries
B. False token
C. False pretenses
D. Ponzi scheme
E. Pretexting
45. Which of the following is the misappropriation of trust funds or money held in a fiduciary
capacity?
A. False entries
B. Defalcation
C. False pretenses
D. Ponzi scheme
E. Pretexting
46. Which of the following is an investment swindle in which high profits are promised from
fictitious sources and early investors are paid off with funds raised from later investors?
A. False entries
B. False token
C. False pretenses
D. Ponzi scheme
E. Pretexting
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-10
47. Zack, the president of ABC Company, falsified documents to make it appear as if he had
been granted stock options on certain dates, and he selected the dates after the fact, picking
dates on which the stock price was low. Which of the following offenses, if any, did he
commit?
A. Insider trading
B. Pretexting
C. Defalcation
D. Stock option back-dating
E. He did not commit any offense
48. Ed goes door-to-door selling magazine subscriptions. Ed knows, however, that he is
simply taking money for subscriptions and has absolutely no intention of ever arranging for
the provision of magazines. Which of the following offenses, if any, has he committed?
A. Defalcation
B. False entry
C. False token
D. False pretenses
E. Ponzi scheme
49. Which of the following is using fraudulent means to obtain information about someone's
phone use?
A. Pretexting
B. Ponzi scheme
C. False pretenses
D. False token
E. Defalcation
50. Bank teller Ben receives $1,000 from a customer for deposit into the customer's bank
account. Instead of placing the money into the customer's account, Ben puts it into his pocket.
Which of the following offenses has he committed?
A. Forgery
B. False entries
C. False token
D. Embezzlement
E. Both false token and embezzlement
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-11
51. Which of the following is a person who illegally accesses or enters another person's or a
company's computer system to obtain information or to steal money?
A. Backer
B. Reacher
C. Hacker
D. Trespasser
E. Illicit user
52. Which of the following is true regarding corporate executives being held personally liable
for business crime?
A. Corporate executives may never be held personally liable for a business crime.
B. Corporate executives may only be held personally liable for a business crime if they
benefited personally from their actions in executing the business crime.
C. Corporate executives may be found personally liable for a business crime regardless of
whether the business crime was committed for personal benefit or for the benefit of the
corporation.
D. A court may not assess criminal liability on a corporate executive unless the executive
directly engaged in the specific criminal violation.
E. Criminal liability may not be assessed against a corporate executive unless the executive
directly engaged in the criminal activity and also profited directly and personally from the
criminal activity
53. Which amendment provides the right to a speedy and public trial?
A. The Second Amendment.
B. The Third Amendment.
C. The Fourth Amendment.
D. The Fifth Amendment.
E. The Sixth Amendment.
54. Which of the following is true regarding the Fourteenth Amendment?
A. It is part of the Bill of Rights.
B. Its safeguards only apply at the federal level.
C. It extends most constitutional rights to defendants at the state level.
D. It is a part of the Bill of Rights, its protections apply at the federal level, and its protections
also apply at the state level.
E. It is not a part of the Bill of Rights, and its protections apply only at the federal level.
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-12
55. Ordinarily, to obtain an arrest warrant, a law enforcement agent must demonstrate that
there is ________ that a suspect committed or is planning to commit a crime.
A. Likely cause
B. Suspected cause
C. Certainty
D. Probable cause
E. Information
56. Of which of the following must a defendant be informed before questioning?
A. That the defendant must answer questions or there will be a presumption of guilt at trial.
B. That statements made to law enforcement before arraignment may not be used against the
defendant in court.
C. That the defendant has the right to consult an attorney before speaking to the police.
D. That unless the defendant can afford any attorney, the defendant will not have an attorney.
E. That the right to an attorney does not begin until after the defendant is arraigned.
57. Which of the following occurs when a defendant makes a first appearance?
A. A magistrate determines whether there was proof beyond a reasonable doubt for the arrest.
B. A magistrate determines whether there was probable cause for the arrest.
C. A magistrate determines whether the defendant was properly booked.
D. A magistrate determines whether there was proof beyond a reasonable doubt for the arrest
and also whether the defendant was properly booked.
E. None of the above.
58. Which of the following is a plea in which the defendant does not admit guilty but agrees
not to contest the charges?
A. Petit defense.
B. Information.
C. Nolo contendere.
D. Sine qua non.
E. Plea avoidance.
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-13
59. A judge reports that a jury was "hung". What does the judge mean?
A. That the jury wanted to hang the defendant by imposing a heavy sentence.
B. That the jury wanted to hang the prosecutor for unjustly charging the defendant.
C. That the jury could not reach a decision.
D. That the jury had waited an excessive amount of time before reaching a verdict.
E. That the jury had waited an excessive amount of time before retiring for the evening.
60. Which of the following is a federal law that has been somewhat successful in the battle
against business-related crimes?
A. The Racketeer Influenced and Corruption Organizations Act.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. All of the above.
E. None of the above.
61. Which of the following was created specifically to combat white-collar crime?
A. The Racketeer Influenced and Corruption Organizations Act.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. The White-Collar Enforcement Act.
E. None of the above.
62. Courts have defined a pattern of racketeering under RICO as more than _______
action[s].
A. One
B. Two
C. Three
D. Four
E. None of the above. There is no requirement of more than one action
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-14
63. Carla learns that her employer, a healthcare facility, is committing fraud against the
government by filing false Medicare claims. Under which of the following might she obtain a
portion of any recovery obtained by the government?
A. RICO.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. The Medicare Recovery Act.
E. The Healthcare Fraud Act.
64. Which of the following was passed largely in response to business scandals of the 2000's,
such as Enron?
A. RICO.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. The Medicare Recovery Act.
E. The Healthcare Fraud Act.
65. Under the Sarbanes-Oxley Act of 2002, it is a felony for an auditor to willfully fail to
maintain proper records of audits and work papers for at least _____ years.
A. Two
B. Three
C. Four
D. Five
E. Ten
66. The ethical theory that requires that we evaluate the morality of an action by imagining
ourselves in the position of the person facing the ethical dilemma is called ______.
A. Situational ethics
B. Ethical relativism
C. Absolutism
D. Consequentialism
E. Relativity ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-15
67. How is absolutism different from ethical relativism and situational ethics?
A. It applies utilitarianism.
B. It holds that a cost-benefit analysis should be applied.
C. It holds that whether an action is moral does not depend on the perspective of the person
facing the ethical dilemma.
D. It applies virtue ethics.
E. It applies corporate ethics principles.
68. Which of the following describes the theory of ethical relativism?
A. Its only principle is the denial of the existence of objective moral standards.
B. It holds that individuals must evaluate actions on the basis of what they feel is best for
themselves based upon objective moral standards.
C. It holds that since morality is relative, we have a basis upon which to criticize the behavior
of others as immoral.
D. It denies the existence of objective moral standards, it holds that individuals must evaluate
actions on the basis of what they feel is best for themselves, but it does not hold that morality
is relative.
E. It denies the existence of objective moral standards; it holds that individuals must evaluate
actions on the basis of what they feel is best for themselves; and it holds that since morality is
relative, no one can criticize another's behavior as immoral.
69. What is another name for absolutism?
A. Ethical fundamentalism
B. Ethical relativism
C. Virtue ethics
D. Rule utilitarianism
E. Ethics of care
70. Which of the following is an ethical school of thought that denies the existence of
objective moral standards?
A. Absolutism
B. Deontology
C. Categorical Imperative
D. Uncertainty of Thought
E. None of the above
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-16
71. Which of the following is true under the ethical theory of absolutism?
A. It requires that individuals defer to a set of rules to guide them and holds that all rational
individuals will agree on the appropriate set of rules to follow.
B. It requires that all individuals decide for themselves what is ethical depending on the
circumstances.
C. It requires that all individuals in a community agree on an appropriate set of ethical rules,
but recognizes that individuals outside the community may have a different set of ethical
rules.
D. It holds that individuals should decide ethical principles based on their upbringing but not
upon the situation itself.
E. It requires that individuals defer to a set of rules to guide them but recognizes that people
may disagree about which rules to follow.
72. What is the basis of consequentialism?
A. Deontology
B. Categorical imperatives
C. Inquiry into the consequences
D. Disregard of consequences
E. Act utilitarianism
73. Kantian ethics is involved with which of the following ethical theories?
A. Deontology
B. Act utilitarianism
C. Rule utilitarianism
D. Absolutism
E. Situational ethics
74. What is a difficulty with the application of virtue ethics?
A. The applicable categorical imperatives.
B. The lack of agreement about the meaning of "the good life."
C. The applicable principle of rights.
D. The ethics of care analysis.
E. Both the applicable categorical imperatives and the lack of agreement about the meaning of
"the good life."
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-17
75. ______ adherents believe that when one individual, the caregiver, meets the needs of one
other person, the cared-for party, the caregiver is helping to meet the needs of all the
individuals who fall within the cared-for party's web of care.
A. Deontology
B. Utilitarianism
C. Absolutism
D. Virtue ethics
E. Ethics of care
76. An ethical theory that urges managers to take those actions that provide the greatest
pleasure after having subtracted the pain or harm associated with the action is question is
called _____.
A. Deontology
B. Utilitarianism
C. Kantian ethics
D. Absolutism
E. Ethical relativism
77. A business manager who deceives everyone because the manager believes the deception
maximizes pleasure over pain in a given situation is acting consistently with which ethical
theory?
A. Act deontology
B. Ethical relativism
C. Act utilitarianism
D. Ethical fundamentalism
E. Rule utilitarianism
78. A business manager who considers it wrong to terminate a person whose spouse has
terminal cancer because a firm has an obligation to support its employees when they are
vulnerable is acting consistently with which ethical theory?
A. Deontology
B. Ethical relativism
C. Act utilitarianism
D. Ethical fundamentalism
E. Rule utilitarianism
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-18
79. Which of the following theories is a form of consequentialism?
A. Deontology
B. Ethical relevance
C. Utilitarianism
D. Ethical fundamentalism
E. Ethical Relativism
80. A reference to "Kantian ethics" most likely involves which of the following theories?
A. Deontology
B. Ethical relevance
C. Utilitarianism
D. Ethical fundamentalism
E. Ethical Relativism
81. A person who believes that they should not cheat on a drug test because if everyone did
so, the drug test would be meaningless is applying a[n] ______.
A. Ethics of care
B. Virtual analysis
C. Cost-benefit analysis
D. Fundamentalist approach
E. Categorical imperative
82. Which of the following helps explain why the principle of deontology may be difficult to
apply?
A. People disagree about what duties we owe to one another.
B. People disagree about whether consequences are positive or negative.
C. People disagree about the ethics of care.
D. People disagree about what duties we owe to one another and also people disagree about
whether consequences are positive or negative.
E. People disagree about what duties we owe to one another, people disagree about whether
consequences are positive or negative, and also people disagree about the ethics of care.
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-19
83. The ethical system in which the development of virtues, or positive character trains such
as courage, justice, and truthfulness, is the basis for morality is called ______.
A. Absolutism decision
B. Virtual analysis
C. Virtue ethics
D. Fundamentalist approach
E. Categorical imperative
84. The ______ holds that the right course of action is the option most consistent with the
building and maintaining of human relationships.
A. Ethics of Care
B. Principle of virtue ethics
C. Deontology
D. Act utilitarianism
E. Rule utilitarianism
Connie, the president of a company that makes paper, has a new interest in the environment.
She recently went to a seminar on environmental dangers and has decided to take steps to
clean things up. She started at home and has now felt compelled to change things at work.
Connie had to face the fact that her company has been cheating and is not in compliance with
applicable environmental regulations due to dumping in the nearby river. Her company has
never been cited, however, because it employs a very large number of people in the
community, including the mayor's wife and the chief-of-police's brother. On her mission to
clean things up, Connie has decided to go even further than the law requires and install the
very latest environmental protections. When she announced her plan, the chair of the
company's board of directors, Brooke, had a meeting with Connie. Brooke told Connie to
analyze the situation carefully because the cost of the additional equipment would mean no
dividend to shareholders and no raise for employees. Furthermore, Brooke told Connie that
installing all the new equipment would result in higher prices for the company's paper
produce and could bankrupt the company because of foreign competition. Brooke hinted that
Connie could be fired if she persisted. Brooke suggested that Connie just be concerned with a
minimal standard of ethics.
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-20
85. Which of the following is the minimal standard that a business must beet in a
consideration of business ethics suggested by Brooke?
A. Decisions must be legal.
B. Decisions must meet the criteria of a follower of the WPH Framework for Business Ethics.
C. Decisions must meet the requirements of the most important stakeholders.
D. Decisions must receive a majority vote of acceptance by employees.
E. Both that decisions must be legal ad that decisions receive a majority vote of acceptance by
employees.
86. Which of the following would be a stakeholder in the above company?
A. The community only
B. The shareholders only
C. Future generations only
D. The community and shareholders only
E. The community, shareholders, and future generations
87. Connie decides to go forward with her plan to clean things up under the theory that she
wants to treat others in the same manner that she wants to be treated. Under Connie's theory,
if she did not understand the importance of the environmental improvements, she would want
them to be thrust upon her. Connie's idea is best referred to as ______.
A. The Golden Rule
B. The Disclosure Principle
C. The Help Peers Test
D. The Sarbanes-Oxley Rule
E. The Greenhouse Rule
Sally is the vice president at Big Name Cosmetics company. Through important and material
nonpublic information, she learns that the company is soon going to purchase a smaller chain
of stores. It is expected that stock in Big Name Cosmetics will rise dramatically at that point.
Sally immediately buys a number of shares of her company's stock. She also tells her friend
Alice about the expected purchase of stores. Alice wanted to purchase stock in the company
but lacked the funds with which to do so. Although she did not have the funds in Bank A,
Alice decided to draw a check on Bank A and deposit the check in Bank B and then proceed
to write a check on Bank B to cover the purchase of the stock. She hoped that she would have
sufficient funds to deposit before the check was presented for payment.
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-21
88. Which offense is Sally guilty of, if any, in purchasing stock of her company?
A. Insider trading
B. Tipping
C. Insider misappropriation
D. Extortion
E. She is guilty of no offense
89. Of which of the following, if any, is Sally guilty of by providing information to Alice
regarding the purchase?
A. She is guilty of an insider-trading violation by tipping the information.
B. She is guilty of an insider-trading violation by being tipped.
C. She is guilty of an insider-trading violation by both tipping and being tipped.
D. She is guilty of criminal extortion.
E. She is not guilty of any offense.
90. Of which of the following offenses, if any, is Alice guilty of by buying stock?
A. She is guilty of insider-trading because she tipped information.
B. She is guilty of an insider-trading violation because she traded on tipped information.
C. She is guilty of extortion.
D. She is guilty of larceny.
E. She is not guilty of any offense.
91. Of what offense, if any, is Alice guilty of by her method of payment?
A. Ponzi scheme
B. Insider-trading scheming
C. Pretexting
D. Check defalcation
E. Check kiting
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-22
Dr. Fred, following a messy divorce, has encountered significant financial difficulties. Dr.
Fred has a friend named Slick Slim who tells Dr. Fred that he has been making lots of money
by selling people a wristband that allegedly places pressure on a nerve that signals hunger
resulting in a lack of appetite. Slick Slim tells Dr. Fred that, although the device does not
really work, people who want to lose weight and look good in their bathing suits will do
anything and that it sells like hotcakes. Slick Slim tells Dr. Fred that he will pay Dr. Fred five
dollars for every band that Dr. Fred can sell to his patients. Dr. Fred proceeds to mail letters to
patients suggesting the use of the band for weight loss. He also uses UPS to mail samples of
the band to some patients along with letters encouraging purchase of the bands. Dr. Fred then
proceeds to bill Medicare for office consultations he has with patients when they come in to
purchase the bands. The scheme is wildly successful. Dr. Fred is able to entirely satisfy his
alimony obligations within just a few months. Unfortunately, as patients begin to see that they
are not having any weight loss, he has been receiving numerous complaints, and a friend of
his told him that he could even be facing some criminal prosecution.
92. By mailing correspondence to patients encouraging purchase of the band, which of the
following offenses, if any, did Dr. Fred commit?
A. False pretenses
B. False entry
C. Defalcation
D. Mail fraud
E. He is not guilty of any offense
93. Which of the following offenses, if any, did Dr. Fred commit when he used UPS to send
correspondence and samples of the bands to patients?
A. False pretenses
B. False entry
C. Defalcation
D. Mail fraud
E. None of the above. He is possible guilty of some state law offense, but mail fraud requires
the use of the U.S. mails.
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-23
94. By which of the following acts, if any, did Dr. Fred commit healthcare fraud?
A. Dr. Fred did not commit any acts of healthcare fraud.
B. By the submission of false claims to Medicare only.
C. By the receipt of kick-backs from Slick Slim only.
D. By the submission of false claims to Medicare and also by the receipt of kick-backs from
Slick Slim.
E. By submitting false claims to Medicare, by receiving kick-backs from Slick Slim, and also
by merely discussing the matter with Slick Slim.
Richard, who just started at his new job as an assistant manager at a fast-food restaurant,
wants to make a good impression. He thinks that things are going great. On only the second
day on the job, however, he sees his boss Jill, the manager, slink out of the restaurant with a
big box of hamburger that she puts in her car and then speeds away. Richard is fairly certain
that she did not pay for the hamburger. Richard asks advice of his best friend, Bruce; his
girlfriend, Sally; his sister, Jenny; and his dad, Frank. Bruce says that there are no real
objective standards and that Richard should just decide what is best for himself. Sally tells
Richard to focus on the consequences. She tells him that it will do no real harm for Richard to
keep his mouth shut because the fast-food restaurant is making plenty of money and probably
does not pay the Jill enough anyway. Plus, getting in trouble with Jill could cause problems at
work, and if Richard loses his job, Richard and Sally might have to put off their marriage.
Jenny says that on balance the greatest good would be to tell on Jill because stealing does not
generally produce the greatest satisfaction. Richard's dad says that as a matter of principle, of
course, Richard should tell on Jill because stealing is simply wrong.
95. Which of the following theories most accurately fits the advice given by Bruce?
A. Deontology
B. Act utilitarianism
C. Rule utilitarianism
D. Ethical relativism
E. Virtue ethics
96. Which of the following theories most accurately fits the advice given by Sally?
A. Deontology
B. Act utilitarianism
C. Rule utilitarianism
D. Ethical relativism
E. Virtue ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-24
97. Which of the following theories most accurately fits the advice given by Jenny?
A. Deontology
B. Act utilitarianism
C. Rule utilitarianism
D. Ethical relativism
E. Virtue ethics
98. Which of the following theories most accurately fits the advice given by Frank?
A. Deontology
B. Act utilitarianism
C. Rule utilitarianism
D. Ethical relativism
E. Virtue ethics
Essay Questions
99. Assume you are hired as the president of a new company. Write a code of ethics for the
firm.
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-25
100. Sally is the president of AAA Components, a company that makes small parts for the
automotive industry. Customers of AAA components are primarily auto manufacturers.
Sally's cousin, Frank, works at the company as a sales representative. A promotion to sales
manager is open. Frank has applied and so has Susan, another sales representative. While both
Frank and Susan are good employees, they are skilled in different areas. Susan is excellent
with technology, with placing orders, and she does an excellent job in following through with
order deficiencies. Frank, on the other hand, is better with customer relations, and customers
seem to like him better. Sally would like to promote Frank but she has two concerns. Her first
concern is that she does not want it to be perceived because Frank is family that she is being
unfair. Her second concern is that she has a suspicion that some customers are somewhat
prejudiced against Susan because she is female. Most customers with whom the sales
representatives deal are male, and Sally suspects that they may give Frank more consideration
than Sally. Define and discuss the WPH framework for business ethics, and within that
framework propose a solution. Be sure to fully address the populations, purposes, and
guidelines included within "W," "P," and "H."
101. List the elements necessary to establish bribery of a public official:
102. Discuss the four alternative ways to punish white-collar criminals discussed in the text.
Discuss the pros and cons of each.
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-26
103. Define the term "criminal fraud" and discuss the three elements generally involved in
establishing criminal fraud.
104. Set forth the basic belief of the following ethical principles:
(a). Ethical relativism
(b). Situational ethics
(c). Consequentialiam
(d). Deontology
(e). Virtue ethics
(f). Ethics of care
105. Milly's best friend and roommate, Sarah, is getting ready for a big date. Sarah had her
hair and nails done, bought a new dress, and spent two hours getting ready. Just as Milly sees
Sarah's date coming down the street, Sarah comes out and asks Milly how she looks.
Unfortunately, the stylish did a terrible job, the nails are an odd shade of purple, and the new
dress is extremely unflattering. Sarah has no time in which to change. Discuss what Milly
would say and why under the following principles:
(a). Deontology
(b). Act utilitarianism
(c). Rule utilitarianism
(d). Virtue ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-27
106. Define virtue ethics and the ethics of care, and contrast virtue ethics with the ethics of
care.
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-28
Chapter 02 Business Ethics and White-Collar Crime Answer Key
True / False Questions
1. (p. 12) Ethical conversation is primarily about finding the one and only right thing to do.
FALSE
AACSB: Ethics Bloom's: Comprehension
Learning Objective: 2-1
Level of difficulty: Easy Topic: Business Ethics and Social Responsibility
2. (p. 13) The social responsibility of business consists only of the expectations employees have
of employers.
FALSE
AACSB: Ethics Bloom's: Knowledge
Learning Objective: 2-1
Level of difficulty: Medium Topic: Business Ethics and Social Responsibility
3. (p. 12) Business ethics is the application of ethics to the special problems and opportunities
experienced by business people.
TRUE
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1
Level of difficulty: Medium
Topic: Business Ethics and Social Responsibility
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-29
4. (p. 13) In some countries businesses must pay bribes in order to receive legitimate supplies.
TRUE
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1 Level of difficulty: Medium
Topic: Business Law and Business Ethics
5. (p. 15) The definition of stakeholder is the same as the definition of shareholder.
FALSE
AACSB: Ethics Bloom's: Comprehension
Learning Objective: 2-3
Level of difficulty: Easy Topic: The WPH Framework for Business Ethics
6. (p. 15) The community in which a firm operates would not be considered a stakeholder of the
firm.
FALSE
AACSB: Ethics Bloom's: Comprehension
Learning Objective: 2-3
Level of difficulty: Easy Topic: The WPH Framework for Business Ethics
7. (p. 15) In an ethical analysis using the WPH Framework referenced in the text, owners are the
most important stakeholders and should receive the greatest consideration in decision
making.
FALSE
AACSB: Ethics
Bloom's: Comprehension Learning Objective: 2-3
Level of difficulty: Medium
Topic: The WPH Framework for Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-30
8. (p. 17) The primary purpose of criminal law is to compensate a victim.
FALSE
AACSB: Reflective Thinking
Bloom's: Comprehension
Learning Objective: 2-4 Level of difficulty: Easy
Topic: Elements of a Crime
9. (p. 18) Under our criminal laws that exist today, white-collar crime is not punishable by
imprisonment.
FALSE
AACSB: Analytic Bloom's: Knowledge
Learning Objective: 2-4
Level of difficulty: Easy Topic: Elements of a Crime
10. (p. 20) Congress amended the Foreign Corrupt Practices Act to conform to the Anti-Bribery
Convention adopted by the Organization for Economic Cooperation and Development.
TRUE
AACSB: Analytic Bloom's: Knowledge
Learning Objective: 2-5
Level of difficulty: Hard Topic: Specific White-Collar Crimes
11. (p. 25) In general, China punishes embezzlement less severely than the U.S.
FALSE
AACSB: Diversity
Bloom's: Comprehension Learning Objective: 2-4
Level of difficulty: Medium
Topic: Specific White-Collar Crimes
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-31
12. (p. 27) Under the common law, a corporation could not be considered a criminal because it
was not an actual person and, thus, did not have a mind.
TRUE
AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-6 Level of difficulty: Medium
Topic: Corporate Criminal Liability
13. (p. 27) Under current law, corporations cannot be held criminally accountable for strict-
liability offenses.
FALSE
AACSB: Analytic Bloom's: Knowledge
Learning Objective: 2-6
Level of difficulty: Medium Topic: Corporate Criminal Liability
14. (p. 39) Ethical relativism is a theory of ethics that denies the existence of objective moral
standards.
TRUE
AACSB: Ethics Bloom's: Knowledge
Learning Objective: 2-1
Level of difficulty: Medium Topic: Theories of Business Ethics
15. (p. 39) Situational ethics is the same thing as ethical relativism.
FALSE
AACSB: Ethics
Bloom's: Comprehension Learning Objective: 2-1
Level of difficulty: Medium
Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-32
16. (p. 39) Absolutism is also referred to as ethical fundamentalism.
TRUE
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1 Level of difficulty: Medium
Topic: Theories of Business Ethics
17. (p. 39) Consequentialism provides a rigid set of rules to follow regardless of the situation.
FALSE
AACSB: Ethics Bloom's: Knowledge
Learning Objective: 2-1
Level of difficulty: Medium Topic: Theories of Business Ethics
18. (p. 40) Rule utililtarianism tells business managers to examine all the potential actions in
each situation and choose the action that yields the greatest amount of pleasure over pain for
all involved.
FALSE
AACSB: Ethics Bloom's: Knowledge
Learning Objective: 2-1
Level of difficulty: Medium Topic: Theories of Business Ethics
19. (p. 39) Utilitarianism is a form of consequentialism.
TRUE
AACSB: Ethics
Bloom's: Knowledge Learning Objective: 2-1
Level of difficulty: Medium
Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-33
20. (p. 40) Deontology consists of acting on the basis of the recognition that certain actions are
right or wrong, regardless of their consequences.
TRUE
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1 Level of difficulty: Medium
Topic: Theories of Business Ethics
Multiple Choice Questions
21. (p. 12) Which of the following is the study and practice of decisions about what is good, or
right?
A. Morals
B. Ethics
C. Consequences
D. Law
E. Business
AACSB: Ethics
Bloom's: Comprehension
Learning Objective: 2-1 Level of difficulty: Easy
Topic: Business Ethics and Social Responsibility
22. (p. 13) A local Chamber of Commerce plans a seminar on "the social responsibility of
business." What does that term reference?
A. The responsibility of business to make profit for shareholders.
B. The responsibility of business to have annual meetings.
C. The expectations that the community imposes on firms doing business inside its borders.
D. The expectations of employees regarding wage rates.
E. The expectations of management in regard to adequate utility resources.
AACSB: Analytic Bloom's: Analysis
Learning Objective: 2-1
Level of difficulty: Medium Topic: Business Ethics and Social Responsibility
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-34
23. (p. 14) As pointed out in the text section "Business Ethics and Italian Taxes" which of the
following is true regarding the application of ethics in a global context?
A. While ethical considerations may vary, the enforcement of laws remains the same from
country to country.
B. Ethical considerations vary from country to country as do practices of law enforcement.
C. Ethical considerations do not vary from country to country although rules for law
enforcement do vary.
D. The Italian government seeks to discuss taxes after returns are filed because
underestimating profits is rarely a problem there.
E. The Italian government seeks to discuss taxes before returns are filed because
underestimating profits is rarely a problem there.
AACSB: Diversity
Bloom's: Comprehension
Learning Objective: 2-2 Level of difficulty: Hard
Topic: Business Law and Business Ethics
24. (p. 15) What do the letters "WPH" mean in reference to the "WPH Framework for Business
Ethics" discussed in the text?
A. Who, Purpose, and How
B. When, Plan, and How
C. Why, Procedure, and Hope
D. Where, Plan, and Hope
E. Where, Procedure, and How
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-3 Level of difficulty: Medium
Topic: The WPH Framework for Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-35
25. (p. 15) Which of the following are stakeholders of a business?
A. Shareholders
B. Employees
C. Customers
D. Management
E. All the above
AACSB: Ethics
Bloom's: Comprehension
Learning Objective: 2-3 Level of difficulty: Easy
Topic: The WPH Framework for Business Ethics
26. (p. 15) Which of the following is true under the WPH process of ethical decision making?
A. The interest of management is ranked higher than that of employees when decisions are
made.
B. The interest of owners is ranked higher than that of both employees and management when
decisions are made.
C. When decisions are made, the interest of the community as a whole is considered last.
D. The interest of management is ranked higher than that of employees when decisions are
made, but the interest of owners is ranked higher than the interest of any group.
E. None of the above are true.
AACSB: Ethics
Bloom's: Comprehension
Learning Objective: 2-3 Level of difficulty: Medium
Topic: The WPH Framework for Business Ethics
27. (p. 15) What are some examples of purpose in the WPH process of ethical decision making?
A. Freedom
B. Security
C. Efficiency
D. Freedom and security, but not efficiency
E. Freedom, security and efficiency
AACSB: Ethics Bloom's: Comprehension
Learning Objective: 2-3
Level of difficulty: Hard Topic: The WPH Framework for Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-36
28. (p. 15) Which of the following is a part of the "how" in the WPH process of decision
making?
A. Public disclosure
B. Customer satisfaction
C. Profit maximization
D. Whistle-blowing
E. All the above
AACSB: Ethics
Bloom's: Comprehension
Learning Objective: 2-3
Level of difficulty: Hard
Topic: The WPH Framework for Business Ethics
29. (p. 15) Positive abstractions that capture our sense of what is good or desirable are called
______.
A. Ethical ideas
B. Values
C. Conscience demands
D. Desirable principles
E. Action goals
AACSB: Ethics
Bloom's: Comprehension
Learning Objective: 2-3 Level of difficulty: Medium
Topic: The WPH Framework for Business Ethics
30. (p. 16) The idea that we should interact with other people in a manner consistent with the
manner in which we would like for them to interact with us is called ______.
A. The Equalization Rule
B. The Ethical Realization Rule
C. The Silver Rule
D. The Golden Rule
E. The Ten Commandments Rule
AACSB: Ethics Bloom's: Comprehension
Learning Objective: 2-3
Level of difficulty: Medium Topic: The WPH Framework for Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-37
31. (p. 16) The "public disclosure" test for ethical behavior is sometimes referred to as the
______ test.
A. Television
B. Powell
C. Self-conscious
D. Golden
E. Primary
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-3
Level of difficulty: Medium
Topic: The WPH Framework for Business Ethics
32. (p. 17) The ______ for ethical behavior seeks consideration of what the world would be like
if a decision is copied by everyone else.
A. Golden Rule
B. Universalization test
C. Public Disclosure
D. Relevant Disclosure
E. World Rule
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-3 Level of difficulty: Medium
Topic: The WPH Framework for Business Ethics
33. (p. 17) Which of the following is true regarding the universalization test for ethical
behavior?
A. It is the same as the public disclosure test.
B. It has been discredited.
C. It is the same as the golden rule test.
D. It has been enacted into law by federal law.
E. None of the above.
AACSB: Ethics Bloom's: Knowledge
Learning Objective: 2-3
Level of difficulty: Medium Topic: The WPH Framework for Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-38
34. (p. 17) Which of the following is the term that describes wrongful behavior in a criminal
action?
A. Mens rea.
B. Actus reus.
C. Res judicata.
D. Stare decisis.
E. None of the above.
AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-4
Level of difficulty: Medium
Topic: White Collar Crime
35. (p. 17) Which of the following is a term describing the wrongful state of mind needed for a
criminal action?
A. Mens rea.
B. Actus reus.
C. Res judicata.
D. Stare decisis.
E. None of the above
AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-4 Level of difficulty: Medium
Topic: White Collar Crime
36. (p. 17) Strict liability is a term used to describe which of the following:
A. Liability without fault.
B. Negligence.
C. Actus reus.
D. Intentional wrongdoing.
E. Recklessness.
AACSB: Analytic Bloom's: Knowledge
Learning Objective: 2-4
Level of difficulty: Easy Topic: White Collar Crime
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-39
37. (p. 17) Which of the following is an example of the imposition of strict liability?
A. A robber pulls a gun to rob a bank teller.
B. A burglar breaks into a home to steal jewelry.
C. A business sells cigarettes to a minor.
D. A minor shoplifts in a department store.
E. An adult shoplifts in a department store.
AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-4 Level of difficulty: Medium
Topic: White Collar Crime
38. (p. 17) Which of the following is punishable by imprisonment for more than one year or
death?
A. Misdemeanor.
B. Felony.
C. Petty offenses.
D. Tort offenses.
E. Any business related crime.
AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-4 Level of difficulty: Easy
Topic: White Collar Crime
39. (p. 17-18) Which of the following are less serious crimes punishable by fines or
imprisonment of less than one year?
A. Misdemeanor.
B. Felony.
C. Petty offenses.
D. Tort offenses.
E. Any business related crime
AACSB: Analytic Bloom's: Comprehension
Learning Objective: 2-4
Level of difficulty: Easy Topic: White Collar Crime
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-40
40. (p. 18) Which of the following are minor offenses usually punishable by a jail sentence of
less than six months or a small fine with an example being violation of a building code?
A. Insignificant offenses.
B. Felony.
C. Petty offenses.
D. Tort offenses.
E. Any business related crime
AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-4
Level of difficulty: Easy
Topic: White Collar Crime
41. (p. 20) Which of the following serves to combat bribery of foreign officials?
A. The Foreign Official Bribery Act
B. The International Bribery Prohibition Act
C. The Fair Business Act
D. The International Fair Business Practices Act
E. The Foreign Corrupt Practices Act
AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-5 Level of difficulty: Medium
Topic: White Collar Crime
42. (p. 20) Which of the following is the making of threats for the purpose of obtaining money
or property?
A. Bribery
B. Criminal Fraud
C. Extortion
D. Both A and C
E. Importation
AACSB: Analytic Bloom's: Knowledge
Learning Objective: 2-5
Level of difficulty: Medium Topic: White Collar Crime
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-41
43. (p. 21) Which of the following is the making of an entry into the books of a bank or
corporation that is designed to represent the existence of funds that do not exist?
A. False entries
B. Defalcation
C. False pretenses
D. Ponzi scheme
E. Pretexting
AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-5
Level of difficulty: Difficult
Topic: White Collar Crime
44. (p. 21) Which of the following is a false document or sign of existence used to perpetrate
fraud, such as making counterfeit money?
A. False entries
B. False token
C. False pretenses
D. Ponzi scheme
E. Pretexting
AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-5 Level of difficulty: Difficult
Topic: White Collar Crime
45. (p. 17) Which of the following is the misappropriation of trust funds or money held in a
fiduciary capacity?
A. False entries
B. Defalcation
C. False pretenses
D. Ponzi scheme
E. Pretexting
AACSB: Analytic Bloom's: Comprehension
Learning Objective: 2-5
Level of difficulty: Difficult Topic: White Collar Crime
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-42
46. (p. 17) Which of the following is an investment swindle in which high profits are promised
from fictitious sources and early investors are paid off with funds raised from later investors?
A. False entries
B. False token
C. False pretenses
D. Ponzi scheme
E. Pretexting
AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-5
Level of difficulty: Difficult
Topic: White Collar Crime
47. (p. 21) Zack, the president of ABC Company, falsified documents to make it appear as if he
had been granted stock options on certain dates, and he selected the dates after the fact,
picking dates on which the stock price was low. Which of the following offenses, if any, did
he commit?
A. Insider trading
B. Pretexting
C. Defalcation
D. Stock option back-dating
E. He did not commit any offense
AACSB: Analytic
Bloom's: Analysis
Learning Objective: 2-5 Level of difficulty: Medium
Topic: White Collar Crime
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-43
48. (p. 21-22) Ed goes door-to-door selling magazine subscriptions. Ed knows, however, that he
is simply taking money for subscriptions and has absolutely no intention of ever arranging for
the provision of magazines. Which of the following offenses, if any, has he committed?
A. Defalcation
B. False entry
C. False token
D. False pretenses
E. Ponzi scheme
AACSB: Analytic
Bloom's: Analysis
Learning Objective: 2-5 Level of difficulty: Easy
Topic: White Collar Crime
49. (p. 23) Which of the following is using fraudulent means to obtain information about
someone's phone use?
A. Pretexting
B. Ponzi scheme
C. False pretenses
D. False token
E. Defalcation
AACSB: Analytic
Bloom's: Analysis
Learning Objective: 2-5 Level of difficulty: Medium
Topic: White Collar Crime
50. (p. 23) Bank teller Ben receives $1,000 from a customer for deposit into the customer's bank
account. Instead of placing the money into the customer's account, Ben puts it into his pocket.
Which of the following offenses has he committed?
A. Forgery
B. False entries
C. False token
D. Embezzlement
E. Both false token and embezzlement
AACSB: Analytic Bloom's: Analysis
Learning Objective: 2-5
Level of difficulty: Easy Topic: White Collar Crime
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-44
51. (p. 25) Which of the following is a person who illegally accesses or enters another person's
or a company's computer system to obtain information or to steal money?
A. Backer
B. Reacher
C. Hacker
D. Trespasser
E. Illicit user
AACSB: Technology
Bloom's: Knowledge
Learning Objective: 2-5
Level of difficulty: Easy
Topic: White Collar Crime
52. (p. 27) Which of the following is true regarding corporate executives being held personally
liable for business crime?
A. Corporate executives may never be held personally liable for a business crime.
B. Corporate executives may only be held personally liable for a business crime if they
benefited personally from their actions in executing the business crime.
C. Corporate executives may be found personally liable for a business crime regardless of
whether the business crime was committed for personal benefit or for the benefit of the
corporation.
D. A court may not assess criminal liability on a corporate executive unless the executive
directly engaged in the specific criminal violation.
E. Criminal liability may not be assessed against a corporate executive unless the executive
directly engaged in the criminal activity and also profited directly and personally from the
criminal activity
AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-6 Level of difficulty: Hard
Topic: Corporate Criminal Liability
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-45
53. (p. 29) Which amendment provides the right to a speedy and public trial?
A. The Second Amendment.
B. The Third Amendment.
C. The Fourth Amendment.
D. The Fifth Amendment.
E. The Sixth Amendment.
AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-7 Level of difficulty: Medium
Topic: Criminal Procedure
54. (p. 29) Which of the following is true regarding the Fourteenth Amendment?
A. It is part of the Bill of Rights.
B. Its safeguards only apply at the federal level.
C. It extends most constitutional rights to defendants at the state level.
D. It is a part of the Bill of Rights, its protections apply at the federal level, and its protections
also apply at the state level.
E. It is not a part of the Bill of Rights, and its protections apply only at the federal level.
AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-7 Level of difficulty: Hard
Topic: Criminal Procedure
55. (p. 29) Ordinarily, to obtain an arrest warrant, a law enforcement agent must demonstrate
that there is ________ that a suspect committed or is planning to commit a crime.
A. Likely cause
B. Suspected cause
C. Certainty
D. Probable cause
E. Information
AACSB: Analytic Bloom's: Comprehension
Learning Objective: 2-7
Level of difficulty: Easy Topic: Criminal Procedure
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-46
56. (p. 29) Of which of the following must a defendant be informed before questioning?
A. That the defendant must answer questions or there will be a presumption of guilt at trial.
B. That statements made to law enforcement before arraignment may not be used against the
defendant in court.
C. That the defendant has the right to consult an attorney before speaking to the police.
D. That unless the defendant can afford any attorney, the defendant will not have an attorney.
E. That the right to an attorney does not begin until after the defendant is arraigned.
AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-7
Level of difficulty: Hard
Topic: Criminal Procedure
57. (p. 30) Which of the following occurs when a defendant makes a first appearance?
A. A magistrate determines whether there was proof beyond a reasonable doubt for the arrest.
B. A magistrate determines whether there was probable cause for the arrest.
C. A magistrate determines whether the defendant was properly booked.
D. A magistrate determines whether there was proof beyond a reasonable doubt for the arrest
and also whether the defendant was properly booked.
E. None of the above.
AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-7 Level of difficulty: Hard
Topic: Criminal Procedure
58. (p. 30) Which of the following is a plea in which the defendant does not admit guilty but
agrees not to contest the charges?
A. Petit defense.
B. Information.
C. Nolo contendere.
D. Sine qua non.
E. Plea avoidance.
AACSB: Analytic Bloom's: Knowledge
Learning Objective: 2-7
Level of difficulty: Medium Topic: Criminal Procedure
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-47
59. (p. 31) A judge reports that a jury was "hung". What does the judge mean?
A. That the jury wanted to hang the defendant by imposing a heavy sentence.
B. That the jury wanted to hang the prosecutor for unjustly charging the defendant.
C. That the jury could not reach a decision.
D. That the jury had waited an excessive amount of time before reaching a verdict.
E. That the jury had waited an excessive amount of time before retiring for the evening.
AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-7 Level of difficulty: Medium
Topic: Criminal Procedure
60. (p. 32) Which of the following is a federal law that has been somewhat successful in the
battle against business-related crimes?
A. The Racketeer Influenced and Corruption Organizations Act.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. All of the above.
E. None of the above.
AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-8 Level of difficulty: Hard
Topic: Tools for Fighting Business Crime
61. (p. 32) Which of the following was created specifically to combat white-collar crime?
A. The Racketeer Influenced and Corruption Organizations Act.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. The White-Collar Enforcement Act.
E. None of the above.
AACSB: Analytic Bloom's: Comprehension
Learning Objective: 2-8
Level of difficulty: Hard Topic: Tools for Fighting Business Crime
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-48
62. (p. 32) Courts have defined a pattern of racketeering under RICO as more than _______
action[s].
A. One
B. Two
C. Three
D. Four
E. None of the above. There is no requirement of more than one action
AACSB: Analytic
Bloom's: Comprehension
Learning Objective: 2-8
Level of difficulty: Hard
Topic: Tools for Fighting Business Crime
63. (p. 33) Carla learns that her employer, a healthcare facility, is committing fraud against the
government by filing false Medicare claims. Under which of the following might she obtain a
portion of any recovery obtained by the government?
A. RICO.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. The Medicare Recovery Act.
E. The Healthcare Fraud Act.
AACSB: Analytic
Bloom's: Analysis
Learning Objective: 2-8 Level of difficulty: Medium
Topic: Tools for Fighting Business Crime
64. (p. 34) Which of the following was passed largely in response to business scandals of the
2000's, such as Enron?
A. RICO.
B. The False Claims Act.
C. The Sarbanes-Oxley Act of 2002.
D. The Medicare Recovery Act.
E. The Healthcare Fraud Act.
AACSB: Analytic Bloom's: Comprehension
Learning Objective: 2-8
Level of difficulty: Medium Topic: Tools for Fighting Business Crime
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-49
65. (p. 34) Under the Sarbanes-Oxley Act of 2002, it is a felony for an auditor to willfully fail to
maintain proper records of audits and work papers for at least _____ years.
A. Two
B. Three
C. Four
D. Five
E. Ten
AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-8
Level of difficulty: Hard
Topic: Tools for Fighting Business Crime
66. (p. 39) The ethical theory that requires that we evaluate the morality of an action by
imagining ourselves in the position of the person facing the ethical dilemma is called ______.
A. Situational ethics
B. Ethical relativism
C. Absolutism
D. Consequentialism
E. Relativity ethics
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1 Level of difficulty: Medium
Topic: Theories of Business Ethics
67. (p. 39) How is absolutism different from ethical relativism and situational ethics?
A. It applies utilitarianism.
B. It holds that a cost-benefit analysis should be applied.
C. It holds that whether an action is moral does not depend on the perspective of the person
facing the ethical dilemma.
D. It applies virtue ethics.
E. It applies corporate ethics principles.
AACSB: Ethics Bloom's: Comprehension
Learning Objective: 2-1
Level of difficulty: Medium Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-50
68. (p. 39) Which of the following describes the theory of ethical relativism?
A. Its only principle is the denial of the existence of objective moral standards.
B. It holds that individuals must evaluate actions on the basis of what they feel is best for
themselves based upon objective moral standards.
C. It holds that since morality is relative, we have a basis upon which to criticize the behavior
of others as immoral.
D. It denies the existence of objective moral standards, it holds that individuals must evaluate
actions on the basis of what they feel is best for themselves, but it does not hold that morality
is relative.
E. It denies the existence of objective moral standards; it holds that individuals must evaluate
actions on the basis of what they feel is best for themselves; and it holds that since morality is
relative, no one can criticize another's behavior as immoral.
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1 Level of difficulty: Hard
Topic: Theories of Business Ethics
69. (p. 39) What is another name for absolutism?
A. Ethical fundamentalism
B. Ethical relativism
C. Virtue ethics
D. Rule utilitarianism
E. Ethics of care
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1 Level of difficulty: Medium
Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-51
70. (p. 39-40) Which of the following is an ethical school of thought that denies the existence of
objective moral standards?
A. Absolutism
B. Deontology
C. Categorical Imperative
D. Uncertainty of Thought
E. None of the above
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1
Level of difficulty: Medium
Topic: Theories of Business Ethics
71. (p. 39) Which of the following is true under the ethical theory of absolutism?
A. It requires that individuals defer to a set of rules to guide them and holds that all rational
individuals will agree on the appropriate set of rules to follow.
B. It requires that all individuals decide for themselves what is ethical depending on the
circumstances.
C. It requires that all individuals in a community agree on an appropriate set of ethical rules,
but recognizes that individuals outside the community may have a different set of ethical
rules.
D. It holds that individuals should decide ethical principles based on their upbringing but not
upon the situation itself.
E. It requires that individuals defer to a set of rules to guide them but recognizes that people
may disagree about which rules to follow.
AACSB: Ethics
Bloom's: Comprehension
Learning Objective: 2-1 Level of difficulty: Medium
Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-52
72. (p. 39) What is the basis of consequentialism?
A. Deontology
B. Categorical imperatives
C. Inquiry into the consequences
D. Disregard of consequences
E. Act utilitarianism
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1 Level of difficulty: Medium
Topic: Theories of Business Ethics
73. (p. 40) Kantian ethics is involved with which of the following ethical theories?
A. Deontology
B. Act utilitarianism
C. Rule utilitarianism
D. Absolutism
E. Situational ethics
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1 Level of difficulty: Easy
Topic: Theories of Business Ethics
74. (p. 40) What is a difficulty with the application of virtue ethics?
A. The applicable categorical imperatives.
B. The lack of agreement about the meaning of "the good life."
C. The applicable principle of rights.
D. The ethics of care analysis.
E. Both the applicable categorical imperatives and the lack of agreement about the meaning of
"the good life."
AACSB: Ethics Bloom's: Comprehension
Learning Objective: 2-1
Level of difficulty: Medium Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-53
75. (p. 41-42) ______ adherents believe that when one individual, the caregiver, meets the needs
of one other person, the cared-for party, the caregiver is helping to meet the needs of all the
individuals who fall within the cared-for party's web of care.
A. Deontology
B. Utilitarianism
C. Absolutism
D. Virtue ethics
E. Ethics of care
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1 Level of difficulty: Medium
Topic: Theories of Business Ethics
76. (p. 39-40) An ethical theory that urges managers to take those actions that provide the greatest
pleasure after having subtracted the pain or harm associated with the action is question is
called _____.
A. Deontology
B. Utilitarianism
C. Kantian ethics
D. Absolutism
E. Ethical relativism
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1 Level of difficulty: Medium
Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-54
77. (p. 40) A business manager who deceives everyone because the manager believes the
deception maximizes pleasure over pain in a given situation is acting consistently with which
ethical theory?
A. Act deontology
B. Ethical relativism
C. Act utilitarianism
D. Ethical fundamentalism
E. Rule utilitarianism
AACSB: Ethics
Bloom's: Evaluation
Learning Objective: 2-1 Level of difficulty: Medium
Topic: Theories of Business Ethics
78. (p. 40) A business manager who considers it wrong to terminate a person whose spouse has
terminal cancer because a firm has an obligation to support its employees when they are
vulnerable is acting consistently with which ethical theory?
A. Deontology
B. Ethical relativism
C. Act utilitarianism
D. Ethical fundamentalism
E. Rule utilitarianism
AACSB: Ethics
Bloom's: Evaluation
Learning Objective: 2-1 Level of difficulty: Hard
Topic: Theories of Business Ethics
79. (p. 39) Which of the following theories is a form of consequentialism?
A. Deontology
B. Ethical relevance
C. Utilitarianism
D. Ethical fundamentalism
E. Ethical Relativism
AACSB: Ethics Bloom's: Comprehension
Learning Objective: 2-1
Level of difficulty: Hard Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-55
80. (p. 40) A reference to "Kantian ethics" most likely involves which of the following
theories?
A. Deontology
B. Ethical relevance
C. Utilitarianism
D. Ethical fundamentalism
E. Ethical Relativism
AACSB: Ethics
Bloom's: Comprehension
Learning Objective: 2-1
Level of difficulty: Hard
Topic: Theories of Business Ethics
81. (p. 40) A person who believes that they should not cheat on a drug test because if everyone
did so, the drug test would be meaningless is applying a[n] ______.
A. Ethics of care
B. Virtual analysis
C. Cost-benefit analysis
D. Fundamentalist approach
E. Categorical imperative
AACSB: Ethics
Bloom's: Comprehension
Learning Objective: 2-1 Level of difficulty: Hard
Topic: Theories of Business Ethics
82. (p. 41) Which of the following helps explain why the principle of deontology may be
difficult to apply?
A. People disagree about what duties we owe to one another.
B. People disagree about whether consequences are positive or negative.
C. People disagree about the ethics of care.
D. People disagree about what duties we owe to one another and also people disagree about
whether consequences are positive or negative.
E. People disagree about what duties we owe to one another, people disagree about whether
consequences are positive or negative, and also people disagree about the ethics of care.
AACSB: Ethics Bloom's: Comprehension
Learning Objective: 2-1
Level of difficulty: Medium Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-56
83. (p. 41) The ethical system in which the development of virtues, or positive character trains
such as courage, justice, and truthfulness, is the basis for morality is called ______.
A. Absolutism decision
B. Virtual analysis
C. Virtue ethics
D. Fundamentalist approach
E. Categorical imperative
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1
Level of difficulty: Medium
Topic: Theories of Business Ethics
84. (p. 41) The ______ holds that the right course of action is the option most consistent with the
building and maintaining of human relationships.
A. Ethics of Care
B. Principle of virtue ethics
C. Deontology
D. Act utilitarianism
E. Rule utilitarianism
AACSB: Ethics
Bloom's: Knowledge
Learning Objective: 2-1 Level of difficulty: Medium
Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-57
Connie, the president of a company that makes paper, has a new interest in the environment.
She recently went to a seminar on environmental dangers and has decided to take steps to
clean things up. She started at home and has now felt compelled to change things at work.
Connie had to face the fact that her company has been cheating and is not in compliance with
applicable environmental regulations due to dumping in the nearby river. Her company has
never been cited, however, because it employs a very large number of people in the
community, including the mayor's wife and the chief-of-police's brother. On her mission to
clean things up, Connie has decided to go even further than the law requires and install the
very latest environmental protections. When she announced her plan, the chair of the
company's board of directors, Brooke, had a meeting with Connie. Brooke told Connie to
analyze the situation carefully because the cost of the additional equipment would mean no
dividend to shareholders and no raise for employees. Furthermore, Brooke told Connie that
installing all the new equipment would result in higher prices for the company's paper
produce and could bankrupt the company because of foreign competition. Brooke hinted that
Connie could be fired if she persisted. Brooke suggested that Connie just be concerned with a
minimal standard of ethics.
85. (p. 13) Which of the following is the minimal standard that a business must beet in a
consideration of business ethics suggested by Brooke?
A. Decisions must be legal.
B. Decisions must meet the criteria of a follower of the WPH Framework for Business Ethics.
C. Decisions must meet the requirements of the most important stakeholders.
D. Decisions must receive a majority vote of acceptance by employees.
E. Both that decisions must be legal ad that decisions receive a majority vote of acceptance by
employees.
AACSB: Ethics
Bloom's: Knowledge Learning Objective: 2-2
Level of difficulty: Medium
Topic: Business Law and Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-58
86. (p. 15) Which of the following would be a stakeholder in the above company?
A. The community only
B. The shareholders only
C. Future generations only
D. The community and shareholders only
E. The community, shareholders, and future generations
AACSB: Ethics
Bloom's: Comprehension
Learning Objective: 2-3 Level of difficulty: Easy
Topic: The WPH Framework for Business Ethics
87. (p. 16) Connie decides to go forward with her plan to clean things up under the theory that
she wants to treat others in the same manner that she wants to be treated. Under Connie's
theory, if she did not understand the importance of the environmental improvements, she
would want them to be thrust upon her. Connie's idea is best referred to as ______.
A. The Golden Rule
B. The Disclosure Principle
C. The Help Peers Test
D. The Sarbanes-Oxley Rule
E. The Greenhouse Rule
AACSB: Ethics
Bloom's: Analysis
Learning Objective: 2-3 Level of difficulty: Medium
Topic: The WPH Framework for Business Ethics
Sally is the vice president at Big Name Cosmetics company. Through important and material
nonpublic information, she learns that the company is soon going to purchase a smaller chain
of stores. It is expected that stock in Big Name Cosmetics will rise dramatically at that point.
Sally immediately buys a number of shares of her company's stock. She also tells her friend
Alice about the expected purchase of stores. Alice wanted to purchase stock in the company
but lacked the funds with which to do so. Although she did not have the funds in Bank A,
Alice decided to draw a check on Bank A and deposit the check in Bank B and then proceed
to write a check on Bank B to cover the purchase of the stock. She hoped that she would have
sufficient funds to deposit before the check was presented for payment.
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-59
88. (p. 20) Which offense is Sally guilty of, if any, in purchasing stock of her company?
A. Insider trading
B. Tipping
C. Insider misappropriation
D. Extortion
E. She is guilty of no offense
AACSB: Analytic
Bloom's: Evaluation
Learning Objective: 2-5 Level of difficulty: Medium
Topic: Specific White-Collar Crimes
89. (p. 20) Of which of the following, if any, is Sally guilty of by providing information to Alice
regarding the purchase?
A. She is guilty of an insider-trading violation by tipping the information.
B. She is guilty of an insider-trading violation by being tipped.
C. She is guilty of an insider-trading violation by both tipping and being tipped.
D. She is guilty of criminal extortion.
E. She is not guilty of any offense.
AACSB: Analytic
Bloom's: Evaluation
Learning Objective: 2-5 Level of difficulty: Medium
Topic: Specific White-Collar Crimes
90. (p. 20) Of which of the following offenses, if any, is Alice guilty of by buying stock?
A. She is guilty of insider-trading because she tipped information.
B. She is guilty of an insider-trading violation because she traded on tipped information.
C. She is guilty of extortion.
D. She is guilty of larceny.
E. She is not guilty of any offense.
AACSB: Analytic Bloom's: Evaluation
Learning Objective: 2-5
Level of difficulty: Medium Topic: Specific White-Collar Crimes
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-60
91. (p. 21) Of what offense, if any, is Alice guilty of by her method of payment?
A. Ponzi scheme
B. Insider-trading scheming
C. Pretexting
D. Check defalcation
E. Check kiting
AACSB: Analytic
Bloom's: Evaluation
Learning Objective: 2-5 Level of difficulty: Medium
Topic: Specific White-Collar Crimes
Dr. Fred, following a messy divorce, has encountered significant financial difficulties. Dr.
Fred has a friend named Slick Slim who tells Dr. Fred that he has been making lots of money
by selling people a wristband that allegedly places pressure on a nerve that signals hunger
resulting in a lack of appetite. Slick Slim tells Dr. Fred that, although the device does not
really work, people who want to lose weight and look good in their bathing suits will do
anything and that it sells like hotcakes. Slick Slim tells Dr. Fred that he will pay Dr. Fred five
dollars for every band that Dr. Fred can sell to his patients. Dr. Fred proceeds to mail letters to
patients suggesting the use of the band for weight loss. He also uses UPS to mail samples of
the band to some patients along with letters encouraging purchase of the bands. Dr. Fred then
proceeds to bill Medicare for office consultations he has with patients when they come in to
purchase the bands. The scheme is wildly successful. Dr. Fred is able to entirely satisfy his
alimony obligations within just a few months. Unfortunately, as patients begin to see that they
are not having any weight loss, he has been receiving numerous complaints, and a friend of
his told him that he could even be facing some criminal prosecution.
92. (p. 22) By mailing correspondence to patients encouraging purchase of the band, which of
the following offenses, if any, did Dr. Fred commit?
A. False pretenses
B. False entry
C. Defalcation
D. Mail fraud
E. He is not guilty of any offense
AACSB: Reflective Thinking
Bloom's: Analysis
Learning Objective: 2-5 Level of difficulty: Medium
Topic: Specific White-Collar Crimes
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-61
93. (p. 23) Which of the following offenses, if any, did Dr. Fred commit when he used UPS to
send correspondence and samples of the bands to patients?
A. False pretenses
B. False entry
C. Defalcation
D. Mail fraud
E. None of the above. He is possible guilty of some state law offense, but mail fraud requires
the use of the U.S. mails.
AACSB: Reflective Thinking
Bloom's: Analysis
Learning Objective: 2-5 Level of difficulty: Medium
Topic: Specific White-Collar Crimes
94. (p. 23) By which of the following acts, if any, did Dr. Fred commit healthcare fraud?
A. Dr. Fred did not commit any acts of healthcare fraud.
B. By the submission of false claims to Medicare only.
C. By the receipt of kick-backs from Slick Slim only.
D. By the submission of false claims to Medicare and also by the receipt of kick-backs from
Slick Slim.
E. By submitting false claims to Medicare, by receiving kick-backs from Slick Slim, and also
by merely discussing the matter with Slick Slim.
AACSB: Reflective Thinking
Bloom's: Analysis
Learning Objective: 2-5 Level of difficulty: Hard
Topic: Specific White-Collar Crimes
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-62
Richard, who just started at his new job as an assistant manager at a fast-food restaurant,
wants to make a good impression. He thinks that things are going great. On only the second
day on the job, however, he sees his boss Jill, the manager, slink out of the restaurant with a
big box of hamburger that she puts in her car and then speeds away. Richard is fairly certain
that she did not pay for the hamburger. Richard asks advice of his best friend, Bruce; his
girlfriend, Sally; his sister, Jenny; and his dad, Frank. Bruce says that there are no real
objective standards and that Richard should just decide what is best for himself. Sally tells
Richard to focus on the consequences. She tells him that it will do no real harm for Richard to
keep his mouth shut because the fast-food restaurant is making plenty of money and probably
does not pay the Jill enough anyway. Plus, getting in trouble with Jill could cause problems at
work, and if Richard loses his job, Richard and Sally might have to put off their marriage.
Jenny says that on balance the greatest good would be to tell on Jill because stealing does not
generally produce the greatest satisfaction. Richard's dad says that as a matter of principle, of
course, Richard should tell on Jill because stealing is simply wrong.
95. (p. 39) Which of the following theories most accurately fits the advice given by Bruce?
A. Deontology
B. Act utilitarianism
C. Rule utilitarianism
D. Ethical relativism
E. Virtue ethics
AACSB: Ethics
Bloom's: Evaluation
Learning Objective: 2-1 Level of difficulty: Hard
Topic: Theories of Business Ethics
96. (p. 40) Which of the following theories most accurately fits the advice given by Sally?
A. Deontology
B. Act utilitarianism
C. Rule utilitarianism
D. Ethical relativism
E. Virtue ethics
AACSB: Ethics
Bloom's: Evaluation
Learning Objective: 2-1 Level of difficulty: Hard
Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-63
97. (p. 40) Which of the following theories most accurately fits the advice given by Jenny?
A. Deontology
B. Act utilitarianism
C. Rule utilitarianism
D. Ethical relativism
E. Virtue ethics
AACSB: Ethics
Bloom's: Evaluation
Learning Objective: 2-1 Level of difficulty: Hard
Topic: Theories of Business Ethics
98. (p. 40) Which of the following theories most accurately fits the advice given by Frank?
A. Deontology
B. Act utilitarianism
C. Rule utilitarianism
D. Ethical relativism
E. Virtue ethics
AACSB: Ethics
Bloom's: Evaluation
Learning Objective: 2-1 Level of difficulty: Hard
Topic: Theories of Business Ethics
Essay Questions
99. (p. 14) Assume you are hired as the president of a new company. Write a code of ethics for
the firm.
Student responses may vary. The General Motors' Code of Business Conduct may serve as a
guide.
AACSB: Ethics Bloom's: Synthesis
Learning Objective: 2-3
Level of difficulty: Hard Topic: Business Law and Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-64
100. (p. 15) Sally is the president of AAA Components, a company that makes small parts for
the automotive industry. Customers of AAA components are primarily auto manufacturers.
Sally's cousin, Frank, works at the company as a sales representative. A promotion to sales
manager is open. Frank has applied and so has Susan, another sales representative. While both
Frank and Susan are good employees, they are skilled in different areas. Susan is excellent
with technology, with placing orders, and she does an excellent job in following through with
order deficiencies. Frank, on the other hand, is better with customer relations, and customers
seem to like him better. Sally would like to promote Frank but she has two concerns. Her first
concern is that she does not want it to be perceived because Frank is family that she is being
unfair. Her second concern is that she has a suspicion that some customers are somewhat
prejudiced against Susan because she is female. Most customers with whom the sales
representatives deal are male, and Sally suspects that they may give Frank more consideration
than Sally. Define and discuss the WPH framework for business ethics, and within that
framework propose a solution. Be sure to fully address the populations, purposes, and
guidelines included within "W," "P," and "H."
Students should reference the WPH process of decision making by identifying stakeholders,
values, and guidelines. Students should also propose a solution. Solutions may vary.
AACSB: Ethics
Bloom's: Evaluation Learning Objective: 2-3
Level of difficulty: Hard
Topic: The WPH Framework for Business Ethics
101. (p. 18) List the elements necessary to establish bribery of a public official:
In order to establish bribery of a public official, the government must show the following
three elements: (1) Something of value is offered, given, or promised to (2) to a federal public
official with (3) intent to influence that person's judgment or conduct.
AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-5
Level of difficulty: Hard
Topic: Specific White-Collar Crimes
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-65
102. (p. 18) Discuss the four alternative ways to punish white-collar criminals discussed in the
text. Discuss the pros and cons of each.
The four alternative ways to punish white-collar criminals are confinement, community
service, disqualification from employment, and house arrest. Students will vary on discussion
of pros and cons of various types of punishment.
AACSB: Analytic
Bloom's: Evaluation
Learning Objective: 2-5 Level of difficulty: Hard
Topic: Classification of Crimes
103. (p. 20) Define the term "criminal fraud" and discuss the three elements generally involved
in establishing criminal fraud.
Criminal fraud encompasses a variety of means by which an individual intentionally uses
some sort of misrepresentation to gain an advantage over another person. The three elements
generally required are as follows: (1) A material false representation made with intent to
deceive; (2) A victim's reasonable reliance upon the false representation; and, (3) Damages.
AACSB: Analytic
Bloom's: Knowledge
Learning Objective: 2-5 Level of difficulty: Hard
Topic: Specific White-Collar Crimes
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-66
104. (p. 39-41) Set forth the basic belief of the following ethical principles:
(a). Ethical relativism
(b). Situational ethics
(c). Consequentialiam
(d). Deontology
(e). Virtue ethics
(f). Ethics of care
(a). Ethical relativism - Asserts that morality is relative.
(b). Situational ethics - Requires that when we evaluate whether an action is ethical, we
imagine ourselves in the position of the person facing an ethical dilemma.
(c). Consequentialiasm - Considers the consequences (i.e., harms and benefits) of making a
particular decision.
(d). Deontology - Recognizes certain actions as right or wrong regardless of the
consequences.
(e). Virtue ethics - encourages individuals to develop virtues (e.g. courage and truthfulness)
that guide behavior.
(f). Ethics of care - Holds that ethical behavior is determined by actions that care for and
maintain human relationships.
AACSB: Ethics
Bloom's: Comprehension Learning Objective: 2-1
Level of difficulty: Hard
Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-67
105. (p. 39-41) Milly's best friend and roommate, Sarah, is getting ready for a big date. Sarah had
her hair and nails done, bought a new dress, and spent two hours getting ready. Just as Milly
sees Sarah's date coming down the street, Sarah comes out and asks Milly how she looks.
Unfortunately, the stylish did a terrible job, the nails are an odd shade of purple, and the new
dress is extremely unflattering. Sarah has no time in which to change. Discuss what Milly
would say and why under the following principles:
(a). Deontology
(b). Act utilitarianism
(c). Rule utilitarianism
(d). Virtue ethics
Student answers will likely vary based upon the application of the facts to the ethical
principles involved. Following are suggestions:
(a). Under the principle of deontology, which consists of acting on the basis of the recognition
that certain actions are right or wrong regardless of consequences, students will likely say that
Sarah should be told the truth.
(b). Act utilitarianism says that the action that yields the greatest amount of pleasure over pain
for all involved should be chosen. Under this principle, Sarah would likely be told that she
looks fine.
(c). Rule utilitarianism holds that general rules that on balance produce the greatest amount of
pleasure for all involved should be followed in each situation. Students may say that
deception does not generally produce the greatest satisfaction.
(d). Virtue ethics is an ethical system in which the development of virtues or positive
character traits is the basis for morality. Students may say that it is virtuous to tell the truth, or
some may say that it is more virtuous to spare Sarah's feelings.
AACSB: Ethics
Bloom's: Evaluation Learning Objective: 2-1
Level of difficulty: Hard
Topic: Theories of Business Ethics
Full file at https://fratstock.euChapter 02 - Business Ethics and White-Collar Crime
2-68
106. (p. 41-42) Define virtue ethics and the ethics of care, and contrast virtue ethics with the
ethics of care.
Virtue ethics is an ethical system in which the development of virtues, or positive character
traits, is the basis for morality. Under this theory, the development of virtues occurs through
practice. The ethics of care holds that the right course of action is the option most consistent
with the building and maintaining of human relationships. According to this theory, when one
person cares for another person, the first person is acting morally.
AACSB: Ethics
Bloom's: Comprehension Learning Objective: 2-1
Level of difficulty: Hard
Topic: Theories of Business Ethics