Exam (elaborations)

MGT 400 Quiz 2 Exam Questions And Answers

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Course
BUSI 400

Institution
Liberty University

A prime social responsibility of business is to safeguard consumers: By supplying consumers with products at the lowest possible cost. By providing new technology. While continuing to supply them with goods and services they want. While maintaining high profit margins. - ANS While...

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mgt 400 quiz 2 exam questions and answers

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MGT 400 Quiz 2 Exam Questions And
Answers

A prime social responsibility of business is to safeguard consumers:
By supplying consumers with products at the lowest possible cost.

By providing new technology.

While continuing to supply them with goods and services they want.

While maintaining high profit margins. - ANS While continuing to supply them with goods
and services they want.

Institutional investors have little incentive to hold their shares and organize to change
management policy.
True
False - ANS False

Shareholders must rely exclusively on the board of directors to protect their interests.
True
False - ANS False

Shareholders have become an increasingly powerful and vocal stakeholder group in
corporations.
True
False - ANS True

Investors may receive an economic benefit from the ownership of stock by receiving:
Interest
Dividends
Capital Gains
Both B and C, not A - ANS Both B and C, not A
Dividends
Capital Gains

It is illegal in the United States to offer stock trade tips to clients based on public information.
True
False - ANS False

,Consumers make less rational choices when they have accurate information about a product.
True
False - ANS False

The two main types of investors that own shares of stock in U.S. corporations are individuals
and institutions.
True
False - ANS True

The doctrine of strict liability extends only to the retailer who is involved in selling the product,
not the manufacturer.
True
False - ANS False

Consumer advocacy groups in the United States actively promote and speak for the interests of
millions of consumers.
True
False - ANS True

Environmental justice - ANS The effort to prevent inequitable exposure to risk, such as
from hazardous waste, in disadvantaged communities.

example, Native American tribes in Utah, Nevada, and New Mexico have organized to block the
construction of nuclear waste disposal facilities on their land, saying the facilities would threaten
their health, culture, and economic viability

Superfund or CERCLA legislation passed in 1980

Established fund to clean up the most dangerous toxic waste sites in the U.S.

Alternative Policy Approaches: Environmental standards - ANS Standard allowable levels
of various pollutants are established by legislation or regulatory action and applied by
administrative agencies and courts.

The traditional method of pollution control

Also called command-and-control regulation because the government commands business
firms to comply with certain standards and often directly controls their choice of technology.

Can be an environmental quality standard or emission standard.

, Alternative Policy Approaches: Market-based mechanisms - ANS Based on the idea that
the market is a better control than extensive standards that specify precisely what companies
must do.

Cap-and-trade: allows businesses to buy and sell the right to pollute, a process.

→Example: European Union's tradable permits

Emissions charges or fees→Example: green taxes or eco-taxes

Each business is charged for the undesirable waste that it emits, with the fee varying according
to the amount of waste released.

The result is, "The more you pollute, the more you pay."

In this approach, polluting is not illegal, but it is expensive, creating an incentive for companies
to clean up.

Government incentives

Environmental-quality standard - ANS polluters control their emissions to maintain air
quality

Emission standard - ANS manufacturing have a limit to the amount that they can put into
the air

Ecologically Sustainable Organization (ESO) - ANS a business that operates in a way that
is consistent with the principle of sustainable development

In other words, an ESO could continue its activities indefinitely, without altering the carrying
capacity of the Earth's ecosystem. Such businesses would not use up natural resources any
faster than they could be replenished or substitutes found. They would make and transport
products efficiently, with minimal use of energy. They would design products that would last a
long time and that, when worn out, could be disassembled and recycled. They would not
produce waste any faster than natural systems could absorb and disperse it. They would work
with other businesses, governments, and organizations to meet these goals.

Is an "ideal," absolute standard against which real organizations can be measured.

Some visionary companies are trying to achieve this.

No companies, including Interface, have yet become truly sustainable businesses, and it will
probably be impossible for any single firm to become an ESO in the absence of supportive

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MGT 400 Quiz 2 Exam Questions And Answers

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