LES 305 Exam 1 Practice questions with
100% correct answers
Many companies that had been headquartered in the United States have decided to conduct corporate
inversions, in which they sell their assets to a foreign corporation so they can claim a new residence in
that country for corporate tax purposes and avoid paying corporate taxes in the United States. This
action is permissible under which school of social responsibility?
a. inherence school
b. enlightened self-interest school
c. invisible hand school
d. social responsibility school - correct answer ✔✔A
With respect to the corporate inversions described above, they are permissible under which ethical
theory?
a. primum non nocere
b. utilitarianism
c. ethical egoism
d. Divine Command
e. None of the answer choices are correct - correct answer ✔✔C
Which question is missing from this model of the steps for analyzing ethical dilemmas in your book?
i. Gather the facts
ii. List missing information and your assumptions.
iii. Generate list of alternatives and apply ethical decision-making models.
iv. Evaluate resolutions for cost, legality and impact.
v. Recommend and take action.
a. Follow management's code of conduct.
, b. Follow your industry's code of conduct.
c. Apply ethical decision-making models.
d. List each stakeholder's interests (concerns) in the dilemma.
e. Nothing is missing from the model above. - correct answer ✔✔D
Is there an ethical issue when restaurants and shops give customers discounts, free meals and other
kickbacks in exchange for good reviews on Yelp and other social media websites? - correct answer
✔✔Yes. This creates a conflict of interest on behalf of the reviewer customers.
When you are in a situation like the one described in the question above and you believe that you won't
be influenced by any type of reward because you are more ethical than most people, you are being
influenced by which of the following? - correct answer ✔✔Overconfidence bias
When you are in a situation like the one described in the question above and you don't want to have to
forfeit this incentive, you are being influenced by which of the following? - correct answer ✔✔Loss
aversion
Lawyers will often complain that their clients tend to describe their behavior in a way that is very
favorable to themselves, rather than telling the entire truth about a situation in an objective manner.
This distortion of the truth can be influenced by which of the following? - correct answer ✔✔Self-serving
bias
When large hedge funds look at the issue with Robinhood and GameStop as a "business problem" rather
than an "ethical problem", they are demonstrating which of the following? - correct answer ✔✔Framing
You are waiting by the trolley tracks in your neighborhood when you notice that a runaway trolley car is
racing toward five people who don't see it. They will very likely die if no one stops the trolley. You are
standing by a lever and you can see that if you pull the lever, the trolley will be diverted to a different
track, saving the five people. However, there is one person on that trolley track who will likely be killed if
you divert the trolley. You are acting ethically under which theory? - correct answer ✔✔Utilitarianism
T/F Committing acts of personal decadence, like driving home drunk after an office holiday party has no
relevance to business ethics - correct answer ✔✔False - This behavior may damage the reputation of the
employee and the person or organization that hired him or her
100% correct answers
Many companies that had been headquartered in the United States have decided to conduct corporate
inversions, in which they sell their assets to a foreign corporation so they can claim a new residence in
that country for corporate tax purposes and avoid paying corporate taxes in the United States. This
action is permissible under which school of social responsibility?
a. inherence school
b. enlightened self-interest school
c. invisible hand school
d. social responsibility school - correct answer ✔✔A
With respect to the corporate inversions described above, they are permissible under which ethical
theory?
a. primum non nocere
b. utilitarianism
c. ethical egoism
d. Divine Command
e. None of the answer choices are correct - correct answer ✔✔C
Which question is missing from this model of the steps for analyzing ethical dilemmas in your book?
i. Gather the facts
ii. List missing information and your assumptions.
iii. Generate list of alternatives and apply ethical decision-making models.
iv. Evaluate resolutions for cost, legality and impact.
v. Recommend and take action.
a. Follow management's code of conduct.
, b. Follow your industry's code of conduct.
c. Apply ethical decision-making models.
d. List each stakeholder's interests (concerns) in the dilemma.
e. Nothing is missing from the model above. - correct answer ✔✔D
Is there an ethical issue when restaurants and shops give customers discounts, free meals and other
kickbacks in exchange for good reviews on Yelp and other social media websites? - correct answer
✔✔Yes. This creates a conflict of interest on behalf of the reviewer customers.
When you are in a situation like the one described in the question above and you believe that you won't
be influenced by any type of reward because you are more ethical than most people, you are being
influenced by which of the following? - correct answer ✔✔Overconfidence bias
When you are in a situation like the one described in the question above and you don't want to have to
forfeit this incentive, you are being influenced by which of the following? - correct answer ✔✔Loss
aversion
Lawyers will often complain that their clients tend to describe their behavior in a way that is very
favorable to themselves, rather than telling the entire truth about a situation in an objective manner.
This distortion of the truth can be influenced by which of the following? - correct answer ✔✔Self-serving
bias
When large hedge funds look at the issue with Robinhood and GameStop as a "business problem" rather
than an "ethical problem", they are demonstrating which of the following? - correct answer ✔✔Framing
You are waiting by the trolley tracks in your neighborhood when you notice that a runaway trolley car is
racing toward five people who don't see it. They will very likely die if no one stops the trolley. You are
standing by a lever and you can see that if you pull the lever, the trolley will be diverted to a different
track, saving the five people. However, there is one person on that trolley track who will likely be killed if
you divert the trolley. You are acting ethically under which theory? - correct answer ✔✔Utilitarianism
T/F Committing acts of personal decadence, like driving home drunk after an office holiday party has no
relevance to business ethics - correct answer ✔✔False - This behavior may damage the reputation of the
employee and the person or organization that hired him or her
