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Assessment Questions

1. What characteristic is common to most entrepreneurs?
  • A. an advanced degree
  • B. deep management experience
  • C. a driven, highly competitive nature
  • D. a large network of business contacts
correct answer

C

2. True or false? Entrepreneurs are usually motivated by the teamwork spirit.
correct answer

False. Entrepreneurs are usually motivated by the hope of profit.

3. Corporate culture comes from ________.
  • A. the commitment of the company’s employees
  • B. the founder’s idea of what the work environment should be like
  • C. government regulations about labor relations
  • D. the nature of the company’s product or service
correct answer

B

4. One danger a growing start-up can face is ________.
  • A. encroaching bureaucracy
  • B. lack of good employees
  • C. legal issues
  • D. venture capitalists
correct answer

A

5. True or false? The phrase caveat emptor means the seller is principally responsible for purchase decisions, not the buyer.
correct answer

False. Caveat emptor means the buyer is principally responsible for purchase decisions, not the seller.

6. True or false? Children are discerning viewers of television advertising.
correct answer

False. Research studies indicate that children are the least-discerning audience for much advertising content.

7. Psychological appeals succeed when they ________.
  • A. make consumers feel better about themselves
  • B. let consumers compare themselves to their peers
  • C. show consumers how to save money
  • D. introduce new products
correct answer A
8. True or false? Even rational adults often fail to cast a suspicious eye to sophisticated ad pitches and end up making frivolous purchases.
correct answer

True

9. Should insurance coverage be mandatory for in some U.S. areas, such as hurricane coverage in the Southeast, tornado coverage in the Midwest, earthquake coverage on the Pacific Coast? Why or why not? Should government subsidies help underwrite the cost of this coverage? Why or why not?
correct answer

Arguably, yes. Residences and businesses in these catastrophe-prone areas certainly would benefit from coverage. The difficulty comes in paying for it; it can be very expensive given the potential for cataclysmic loss. So an apparatus that would combine payment on the part of the insured but supplemented with tax subsidies might be most fair.

10. How prevalent has redlining been in the United States?
correct answer

Very. Though it is essentially illegal everywhere, traces of it remain.

11. Premium rates for insurance coverage are based on statistical calculations of the historical rate of incidence of certain kinds of accidents, disasters, and theft, among other calamities against which we insure ourselves. Is this the most equitable way to assign these rates? Why or why not?
correct answer

Statistically, this makes sense, but it often plays out unfairly for those insured individuals who absolutely do not contribute to the higher incidence of claims in certain areas. For example, suppose you are a very safe driver in a neighborhood of dangerous drivers. Your premiums for auto insurance will reflect not so much your own safety record as the overall rate of claims in your community.

12. True or false? Business insurance is a relatively recent offering.
correct answer

False. British merchant shippers began insuring themselves against loss of their cargos in the seventeenth century.

13. True or false? Insurance coverage offers a benefit we hope never to claim.
correct answer

True

14. True or false? Employer-sponsored wellness programs have no downsides for employees.
correct answer

False. Employer-sponsored wellness programs carry some risk of invasion of worker privacy.

15. True or false? Most European countries have multipayer health care systems like the United States.
correct answer

False. Most European countries have single-payer health care systems.

16. In the European tradition, the main responsibility for supplying workers with health care lies with which of these groups?
  • A. the government and labor unions
  • B. labor unions
  • C. nonprofit agencies and private companies
  • D. individual workers
correct answer

A

17. A job setting in which an employee gym and a snack bar featuring healthy foods and beverages were perks would benefit which of these groups?
  • A. the owners/managers
  • B. the customers or clients of the firm
  • C. the employees
  • D. all the above
correct answer D
18. Could an ethical case be made for managers dictating that employees adopt or avoid certain lifestyle practices (e.g., legally consuming cannabis) even when they are off the job? What would that argument be? What ethical counterarguments could be made?
correct answer

Yes, such a case could be made, particularly if the company is providing health coverage for its employees, because the cost of this coverage to the employer is driven by the number of health claims made against it by workers. Furthermore, absenteeism reflects the health of employees, and their actions off the job help determine this. Conversely, permitting employers to stipulate worker behavior when not on the clock places great oversight in the hands of management and reduces individual autonomy significantly.

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