Business Ethics and Entrepreneurship

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Page1Business Ethics and EntrepreneurshipThis test has a total maximum score of 100 marks. Please answer the multiple choice questions on thetest paper by selecting the one best answer to each question. Please answer the short answer andparagraph questions in the test booklet provided.1.When comparing small businesses to their larger competitors, it is clear that:A)bigger is always better.B)small firms can always outperform big firms on a level playing field.C)small firms often can offer more personalized customer services than big firms.D)small firms are slower to respond to opportunities than are large firms.2.Insider trading involves:A)an Internet activity that establishes a barter exchange system between businesses.B)investors using private company information to further their own fortunes.C)the exchange of assets between companies in the same industry.D)a payment or reward for socially conscious behaviour.3.Mel is a major stockholder in Precision Transmission Services (PTS), a nationwidenetwork of transmission repair shops founded by his father. Currently, PTS stock is soldon the open market, but Mel has talked to several relatives about his desire to get all ofthe PTS stock back in his family's hands. Mel is interested in:A)taking the firm private.B)a hostile takeover in the firm.C)converting the firm to a general partnership.D)forming a master limited partnership.4.In a limited liability partnership, each partner's risk of losing personal assets is:A)limited to the amount that partner invested in the company.B)limited to losses that result from their own acts and omissions and the acts andomissions of those who work under their supervision.C)determined entirely by the maximum loss provision established by the articles ofco-partnership.D)nonexistent.5.The importance of entrepreneurs to our economy is found in their:A)impact on the political process.B)ability to create jobs for others.C)contributions of money to organizations that help people in need.D)ability to influence national macroeconomics polices.6.The largest source of capital for entrepreneurs is usually fromA)venture capitalists.B)loansharks.C)provincial and municipal governments.D)personal savings.

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Page27.After developing a code of ethics, it should be communicated to:A)everyone with whom the business has dealings.B)the police in jurisdictions where the business has operations.C)all levels of management.D)stockholders.8.Lamont wants to improve his chances to be a successful entrepreneur and so he haswritten a business plan. One advantage of developing this plan is that it:A)meets federal reporting requirements of Revenue Canada.B)insures financing will be available from the venture capitalists.C)forces Lamont to think carefully about all aspects of his planned business.D)will enable him to switch from a sole proprietorship to a corporation without anyfurther paperwork.9.Three questions often help individuals and organizations in deciding if their decisionsare ethical. All of the following are ethics check questionsexcept:A)Is it legal?B)Is it balanced?C)Has it been done before?D)How will it make me feel about myself?10.A major reason given for conglomerate mergers is that they:A)diversify business operations and investments.B)allow the firm to have a more dominant position in its market.C)enable the firm to enjoy a higher degree of specialization.D)give the firm a more secure access to needed materials and components and bettercontrol over quality.11.As a new employee, Vanessa has heard her boss say, "Do whatever it takes to meet yoursales quota. However, anyone caught violating a law will be immediately fired."Vanessa recognizes this as a(n) ________-based code of ethics.A)InternetB)personal responsibilityC)complianceD)integrity12.An ethic of care is based on:A)justiceB)fairnessC)equalityD)responsibility

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Page313.Sally Wright has just taken early retirement, including a substantial retirementallowance. She wishes to continue working and wants to invest her retirementallowance in her own small business. She worked for the same employer in the samejob all of her working career and therefore has no experience with running her ownbusiness. In starting her own business she would be well-advised to:A)start the business from scratch.B)buy an existing business.C)buy a franchise.D)work for someone in an existing small business for the next 10 years.14.A(n) ________-based ethics code emphasizes the prevention of unlawful behaviour byincreasing control and penalizing wrongdoers.A)legalB)corporate responsibilityC)complianceD)integrity15.Finley is a limited partner in Gettout & Associates. Heywood U. Gettout, one of thesenior general partners in the company, must temporarily leave the company to attend tosome personal matters. Heywood has asked Finley to temporarily perform hismanagerial duties while he is gone. As a limited partner, Finley:A)can fill in as a manager whenever necessary, as long as it is for only a limited time.B)can make managerial decisions as long as they do not involve the payment ofmoney.C)cannot participate in the management of the partnership.D)can manage the firm as long as he gets approval from the company's other generalpartners.16.A ____________ is the share of profits or percentage of sales a franchisee pays to afranchisor.A)royaltyB)dividendC)premiumD)co-pay17.The majority of CEOs blame unethical employee conduct on:A)the breakdown of traditional religious institutions.B)a failure of leadership to establish ethical standards.C)the increase in lawsuits used to avoid personal responsibility.D)the nation's business schools that tolerate unethical behaviour in students.18.Todd and Jorge have considered starting their own business but are concerned about thepossibility of losing their personal assets if the business fails. One way for both Toddand Jorge to avoid this risk would be to organize their firm as a:A)general partnership.B)limited partnership.C)corporation.D)sole proprietorship.

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