Free Business Ethics and Society Practice Questions

Sample Practice Questions

Try these 10 sample questions from the Business Ethics and Society practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

1. 1How does legal compliance relate to ethical responsibility in business?

   1. A.Compliance meets a legal baseline, while ethics can demand more.Correct answer: A
   2. B.Compliance determines every ethical responsibility a firm has.
   3. C.Ethics replaces the obligation to comply with applicable law.
   4. D.Ethical responsibility applies only when legislation is absent.

   Explanation: OpenStax states, "Ethical observance builds on this baseline" and explains that legal compliance is the baseline minimum. An action can comply with law yet still raise an ethical concern.

   Reference: Business Ethics: Being a Professional of Integrity — Acting with Integrity

2. 2In Kohlberg's study of moral dilemmas, what was most important for classifying a response?

   1. A.The conclusion chosen without considering the reasons.
   2. B.The reasoning used to justify the response.Correct answer: B
   3. C.The action the researcher personally prefers.
   4. D.The social approval that the conclusion receives.

   Explanation: OpenStax states, "he was interested in the reasoning behind your answer" Kohlberg classified the reasoning, rather than the simple yes-or-no conclusion.

   Reference: Psychology: Lifespan Theories — Section 9.2, Theory of Moral Development

3. 3In the principal-agent relationship between corporate owners and managers, who is the principal?

   1. A.The manager hired to operate the company.
   2. B.The shareholder who owns the company.Correct answer: B
   3. C.The customer who buys its products.
   4. D.The supplier that sells it materials.

   Explanation: OpenStax states, "the principal (shareholder or owner)" The shareholder is the principal; the manager is the agent.

   Reference: Principles of Finance: Agency Issues — Section 2.4, Agency Problems and Issues

4. 4How does corporate social responsibility broaden a company's view of its role?

   1. A.It replaces all financial goals with charitable giving.
   2. B.It includes environmental and social concerns alongside business performance.Correct answer: B
   3. C.It treats legal compliance as the only responsibility to stakeholders.
   4. D.It limits responsibility to the interests of shareholders alone.

   Explanation: OpenStax describes CSR as including "caring for the environment and acting on other social concerns" as well as products, prices and wages. It recognizes broader consequences of business activity.

   Reference: Business Ethics: Corporate Social Responsibility — Section 3.4, Corporate Social Responsibility Defined

5. 5What is a central policy problem in deciding how much to regulate business?

   1. A.Maximizing compliance costs regardless of public benefits.
   2. B.Balancing the benefits of regulation against its costs.Correct answer: B
   3. C.Measuring benefits while disregarding regulatory costs.
   4. D.Measuring costs while disregarding potential public benefits.

   Explanation: The source states, "weighing the benefits of regulation against the costs" OpenStax describes the challenge as finding a balance between over- and under-regulation.

   Reference: Business Ethics: Government and the Private Sector — Government Regulation and the Constitution

6. 6A worker believes a serious workplace hazard exists. What type of complaint does OSHA say the worker may file while requesting an inspection?

   1. A.A safety and health complaint that can be filed confidentially.Correct answer: A
   2. B.A safety complaint only if the employer waives confidentiality.
   3. C.A complaint only after the employer consents to inspection.
   4. D.A complaint that must identify the worker publicly to the employer.

   Explanation: The agency states, "right to file a confidential safety and health complaint" OSHA permits a confidential complaint and an inspection request when a serious hazard or standards violation is believed to exist.

   Reference: File a Complaint — Safety and health and whistleblower complaints

7. 7Under FTC advertising guidance, what distinguishes an express claim from an implied claim?

   1. A.An express claim is literally made; an implied claim is conveyed indirectly.Correct answer: A
   2. B.An express claim is inferred; an implied claim is stated literally.
   3. C.An express claim concerns price; an implied claim concerns safety.
   4. D.An express claim needs evidence; an implied claim never needs evidence.

   Explanation: The agency states, "An express claim is literally made in the ad." The FTC also explains that an implied claim is conveyed indirectly or by inference.

   Reference: Advertising FAQs: A Guide for Small Business — How does the FTC determine if an ad is deceptive?

8. 8What is corporate personhood in the legal sense described by OpenStax?

   1. A.A corporation is a separate entity with some legal rights and responsibilities.Correct answer: A
   2. B.A corporation is a human being with every natural person's rights.
   3. C.Shareholders and the corporation are always the same legal person.
   4. D.Corporate status eliminates all duties toward others.

   Explanation: The source states, "a corporation, separate and apart from the people who are its owners and managers" The legal entity is distinct from its owners and managers, although it is not a natural person.

   Reference: Business Ethics: Sustainability, Business and the Environment — Section 4.2, Environmental Justice

9. 9Why might a long-term perspective change how a manager evaluates a business decision?

   1. A.It treats a single quarter as the full measure of the decision.
   2. B.It considers effects that may take longer to become visible.Correct answer: B
   3. C.It assumes that every ethical decision yields immediate profit.
   4. D.It excludes effects on reputation from business performance.

   Explanation: OpenStax describes a short-term perspective as one "which fails to take into account effects that require a longer time to develop." Long-term evaluation includes those delayed effects.

   Reference: Business Ethics: Ethics and Profitability — Section 1.2, Profitability and Success: Thinking Long Term

10. 10According to Kohlberg's theory of moral development, which reasoning illustrates the obedience-and-punishment stage?

    1. A.A rule should be followed to prevent punishment.Correct answer: A
    2. B.A rule should be assessed against universal justice.
    3. C.A rule should be followed to preserve social order.
    4. D.A rule should be assessed against a social contract.

    Explanation: OpenStax states, "The physical or tangible consequence of punishment is the driver of decision-making." Avoiding punishment is the defining motive in this stage.

    Reference: Fundamentals of Nursing: Specific Developmental Theories — Theory of Moral Development: Obedience and Punishment