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Business grassroots strategy is built on corporate stakeholders
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Business and Society
Multiple Choice Questions (Enter your answers on the enclosed answer sheet)
1) Business grassroots strategy is built on corporate stakeholders as identified by what?
a) Rent chain
b) Money
c) Partisan politics
d) Median voters
2) The principal vehicle for creating a majority coalition is from:
a) Collection of minorities
b) Large firms
c) Those without power
d) Anyone willing to join
3) Business coalitions are made up of three types except which of the following?
a) Peak organizations
b) Industry organizations
c) Ad hoc coalitions
d) stakeholder groups
4) Which of the following peak associations focuses on the concerns of small business?
a) Small Businesses Inc.
b) Association of Small Business Concerns
c) Entrepreneurs and Small Business Organization
d) National Federation of Independent Business.
5) Trade associations serve a variety of _____ and ______ functions.
a) market, corporate
b) market, nonmarket
c) corporate, nonmarket
d) corporate, stakeholder
6) In Buckley v. Valeo (1976), the Supreme Court ruled what concerning limits on cam-
paign expenditures?
a) There are definite dollar limits
b) Any limit threatens the freedoms of speech and association
c) A limit of $100 million
d) A partial limit is fine to preserve the First Amendment
Unit 3 Examination
Business and Society
7) Campaign contributions are made for all but which of the following reasons?
a) Influence legislative voting
b) Obtain access to present or future officeholders
c) Affect outcome of elections
d) Help a CEO with his/her political future
8) In which of the following venues do managers testify?
a) Regulatory agencies
b) Congressional committees
c) Courts
d) All are correct
9) The Hart-Scott-Rodino Antitrust Improvement Act of 1976 requires premerger notifi-
cations to the ___ and the ___ of plans to merge.
d) There is no such provision in the law
10) In 2000, what was the number of possible mergers reported under the provisions of
the Hart-Scott-Rodino Act?
a) None because firms do not need to report such information to the government
b) 1,547
c) 2,389
d) 4,926
11) Private antitrust suits appear to be going in which of the following directions?
a) Increasing substantially
b) Decreasing substantially
c) Doubling in numbers year to year
d) Almost disappearing
12) The Clayton Act has a provision for ____ damages and this provides a _____ incentive
to file suits.
a) quadruple; strong
b) treble; strong
c) seven times; strong
d) only twice; weak
Unit 3 Examination
Business and Society
13) If acts are said to be per se illegal, one defense allowed is the defendant did not com-
mit the act and the second is what?
a) Defendant is irrational
b) Defendant is unethical
c) Prosecution is out to get the defendant
d) The defendant committed the act, but it was not unreasonable to do so
14) Which of the following characteristics is not part of the Structural school of thought
regarding the purpose of antitrust policy?
a) International and global
b) Government is to protect society from economic power
c) Competition is the best protector of consumers and economic efficiency
d) Market is fragile and prone to failure
15) Under the structural or traditional approach, it believed that in concentrated indus-
tries collusion is _____________.
a) unlikely
b) given
c) likely
d) very rare
16) Which of the following statements is a characteristic of the Chicago school of thought
pertaining to antitrust laws?
a) Social and political as well as economic objectives
b) Markets are resilient enough that market imperfections can be addressed
through incentives
c) Government is to protect society from economic power
d) Market power derives from both horizontal and vertical arrangements
17) The Congress exerts great influence on the regulatory agencies through which of the
following means?
a) Using its budgetary and oversight authorities
b) Appointing the regulatory agencies administrators
c) Using the Office of Management and Budget (OMB)
d) Using the independent commissions
Unit 3 Examination
Business and Society
18) Which of the following is a cause of market imperfection?
a) Pure competition
b) Asymmetric information
c) Government has no intervention in the economy
d) Complete free trade
19) In the case of a natural monopoly, economic theory recommends that government set
the price of goods and services to be:
a) Equal to total cost of production
b) Equal to average cost of production
c) Equal to marginal cost of production
d) Equal to the competitors’ price
20) Which one of the following activities could be considered a nonpecuniary externality?
a) Effect of a firm’s new plant on the demand and price of labor
b) The increase in the oil price after the oil shock of the 1970’s
c) Generating pollution by driving a car
d) All the above have nonpecuniary externalities
21) Which of the following is not a public good?
a) National defense
b) Radio broadcasting
c) Bridges and roads
d) Buying a TV set from the army’s surplus store
22) What term below refers to behavior induced when people do not bear full conse-
quences for their actions?
a) Moral hazard
b) Transaction costs
c) Asymmetric information
d) Free entry and exit into the market
23) What theory predicts that regulation initially will be found where there are market
imperfections and over time will evolve to serve the interests of the regulated indus-
a) Interest group
b) Capture
c) Flexible
d) Jurassic
Unit 3 Examination
Business and Society
24) Capture theory predicts that regulation will be found where there is/are market
a) perfection
b) shifts
c) imperfections
d) regularities
25) ______ occurs when one group of customers pays more and another group pays less
than the cost of providing their service.
a) Market imperfection
b) Free-riding
c) Moral hazard
d) Cross-subsidization

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