Greenwashing occurs when an organization gives a misleading impression that its products or practices are environmentally responsible.
Incorrect! Try again.
16What is the main purpose of competition law?
Legislation for anti-competitive and unfair trade practices
Easy
A.To protect market competition
B.To set employee salaries
C.To guarantee that one domestic company becomes the permanent market leader
D.To control weather risks
Correct Answer: To protect market competition
Explanation:
Competition law seeks to preserve fair competition and prevent conduct that improperly restricts markets.
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17What is price-fixing?
Legislation for anti-competitive and unfair trade practices
Easy
A.A retailer correcting an error
B.A government changing tax rates
C.A business independently lowering prices after improving production efficiency
D.Competitors agreeing on prices
Correct Answer: Competitors agreeing on prices
Explanation:
Price-fixing occurs when competitors coordinate prices instead of setting them independently.
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18What is a cartel?
Legislation for anti-competitive and unfair trade practices
Easy
A.A group coordinating to restrict competition
B.A consumer protection agency
C.A public labor union
D.A government department that publishes international trade statistics each month
Correct Answer: A group coordinating to restrict competition
Explanation:
A cartel is a group of independent businesses that cooperate to limit competition, often through price-fixing or market sharing.
Incorrect! Try again.
19In international trade, what is dumping?
Legislation for anti-competitive and unfair trade practices
Easy
A.Selling exports at unfairly low prices
B.Recycling goods in foreign markets
C.Selling every exported product at exactly the same price in all countries
D.Increasing domestic production taxes
Correct Answer: Selling exports at unfairly low prices
Explanation:
Dumping generally involves exporting goods at unfairly low prices, potentially harming producers in the importing country.
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20Which legal measure may be imposed in response to proven dumping?
Legislation for anti-competitive and unfair trade practices
Easy
A.A workplace safety audit
B.A permanent ban on every product imported from the exporting country
C.An anti-dumping duty
D.A consumer loyalty discount
Correct Answer: An anti-dumping duty
Explanation:
An anti-dumping duty may be applied to offset the harmful price advantage created by dumped imports.
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21A multinational plans to enter a low-income country where local law permits wages below the amount needed for basic living expenses. Which policy best reflects socially responsible globalization?
Globalization with social responsibility
Medium
A.Delay hiring until national wages increase
B.Pay the legal minimum in every location
C.Use expatriate wage rates for all workers
D.Adopt a locally assessed living-wage standard
Correct Answer: Adopt a locally assessed living-wage standard
Explanation:
A locally assessed living wage respects local conditions while going beyond minimum legal compliance to support workers' basic needs.
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22A global retailer wants to support small suppliers in a developing economy without creating permanent dependence. Which initiative is most appropriate?
Globalization with social responsibility
Medium
A.Offer training and long-term fair contracts
B.Provide one-time charitable donations
C.Replace local firms with foreign contractors
D.Require suppliers to accept below-market prices
Correct Answer: Offer training and long-term fair contracts
Explanation:
Training builds supplier capability, while fair long-term contracts create sustainable participation in global value chains.
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23A company reports global job creation but does not disclose community displacement caused by a new factory. Which principle is most directly weakened?
Globalization with social responsibility
Medium
A.Stakeholder accountability
B.Market segmentation
C.Currency convertibility
D.Product standardization
Correct Answer: Stakeholder accountability
Explanation:
Stakeholder accountability requires the company to disclose and address significant effects on communities, including displacement.
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24Two possible factory sites offer equal financial returns. Site X has stronger worker protections and lower community disruption, while Site Y offers larger tax concessions. A stakeholder-oriented decision would favor which choice?
Globalization with social responsibility
Medium
A.Either site because returns are identical
B.Site Y because concessions remove ethical duties
C.Site X because broader impacts are better
D.Site Y because taxes determine social value
Correct Answer: Site X because broader impacts are better
Explanation:
A stakeholder approach considers workers and communities alongside financial returns, making Site X the more responsible choice.
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25A food company adapts its global sourcing policy after consulting farmers, consumers, employees, and local communities. What is the main benefit of this approach?
Globalization with social responsibility
Medium
A.It balances affected stakeholder interests
B.It eliminates every commercial risk
C.It transfers accountability to communities
D.It guarantees identical local regulations
Correct Answer: It balances affected stakeholder interests
Explanation:
Consultation helps the company identify and balance the interests of groups affected by its global operations.
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26An audit finds that supplier employees work excessive overtime voluntarily because their base wages are very low. What is the most ethical buyer response?
Ethical dimensions of labor conditions
Medium
A.Ban all overtime without changing wages
B.Raise standards for wages and working hours
C.Ignore the issue because overtime is voluntary
D.End the audit program to reduce supplier costs
Correct Answer: Raise standards for wages and working hours
Explanation:
Nominal consent may not be meaningful when low base wages create economic pressure, so both wages and hours should be addressed.
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27A supplier uses recruitment agencies that charge migrant workers large placement fees, leaving them indebted. Which action best addresses the ethical risk?
Ethical dimensions of labor conditions
Medium
A.Limit recruitment to workers with savings
B.Require workers to repay fees more quickly
C.Deduct agency fees directly from monthly wages
D.Prohibit worker-paid fees and reimburse workers
Correct Answer: Prohibit worker-paid fees and reimburse workers
Explanation:
Large recruitment debts can create conditions resembling forced labor; employer-paid recruitment and reimbursement directly address the harm.
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28A factory passes scheduled inspections but workers privately report unsafe machinery. Which monitoring change is most likely to improve reliability?
Ethical dimensions of labor conditions
Medium
A.Schedule inspections further in advance
B.Review production volume instead of safety records
C.Use unannounced audits and confidential interviews
D.Request only the factory's written safety policy
Correct Answer: Use unannounced audits and confidential interviews
Explanation:
Unannounced visits and confidential worker interviews reduce the opportunity to conceal conditions and provide independent evidence.
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29A multinational discovers underage workers at a supplier. Which response best protects the children while correcting the violation?
Ethical dimensions of labor conditions
Medium
A.Hide their records until they reach legal age
B.Transfer them permanently to unpaid home work
C.Fund remediation and restore access to education
D.Dismiss them immediately without further support
Correct Answer: Fund remediation and restore access to education
Explanation:
Responsible remediation removes children from harmful work while protecting income needs and supporting a return to education.
Incorrect! Try again.
30Workers at an overseas supplier are legally permitted to organize, but management threatens to reduce shifts if they join a union. Which labor right is being undermined?
Ethical dimensions of labor conditions
Medium
A.Freedom of international movement
B.Equal pay for equal work
C.Freedom of association
D.Protection of trade secrets
Correct Answer: Freedom of association
Explanation:
Threatening workers for union participation interferes with their right to organize and bargain collectively.
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31A manufacturer can legally discharge treated wastewater into a river, but scientific evidence suggests possible long-term ecosystem damage. Which principle supports taking additional preventive action?
Ethics and the environment
Medium
A.The comparative advantage principle
B.The shareholder primacy principle
C.The national treatment principle
D.The precautionary principle
Correct Answer: The precautionary principle
Explanation:
The precautionary principle supports preventive measures when credible environmental harm is possible despite scientific uncertainty.
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32A firm moves a highly polluting process to a country with weaker environmental rules while selling the output worldwide. What ethical concern does this most clearly illustrate?
Ethics and the environment
Medium
A.Circular economy adoption
B.Pollution haven behavior
C.Environmental product labeling
D.Green technology diffusion
Correct Answer: Pollution haven behavior
Explanation:
Pollution haven behavior occurs when firms locate damaging activities where environmental standards or enforcement are weaker.
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33A company claims that its product is carbon neutral because it purchases offsets, but it has made no effort to reduce avoidable emissions. Which improvement would make the claim more ethically credible?
Ethics and the environment
Medium
A.Purchase cheaper offsets without third-party review
B.Increase advertising about the offset program
C.Exclude transport emissions from its calculations
D.Reduce direct emissions before using verified offsets
Correct Answer: Reduce direct emissions before using verified offsets
Explanation:
Credible climate action prioritizes actual emission reductions and uses independently verified offsets mainly for residual emissions.
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34A mining project is profitable but may impose water-treatment costs on nearby residents. Under the polluter-pays principle, who should bear those costs?
Ethics and the environment
Medium
A.The mining company
B.Future consumers
C.Local charities
D.The affected residents
Correct Answer: The mining company
Explanation:
The polluter-pays principle assigns the costs of preventing and remedying pollution to the party responsible for creating it.
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35A global electronics producer wants to apply a circular-economy approach. Which policy is most consistent with that goal?
Ethics and the environment
Medium
A.Design devices for repair, reuse, and recovery
B.Shorten product life to increase replacement sales
C.Send mixed electronic waste to open landfills
D.Use more packaging to improve shelf visibility
Correct Answer: Design devices for repair, reuse, and recovery
Explanation:
Circular design keeps products and materials in use longer through repair, reuse, refurbishment, and material recovery.
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36Three competing shipping companies secretly agree to charge the same fuel surcharge on international routes. Which practice is most likely involved?
Legislation for anti-competitive and unfair trade practices
Medium
A.Transfer pricing
B.Market forecasting
C.Price fixing
D.Product differentiation
Correct Answer: Price fixing
Explanation:
An agreement among competitors to coordinate prices or surcharges is horizontal price fixing and is generally prohibited by competition law.
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37A foreign producer sells goods in an export market below normal value, causing material injury to domestic producers. Which trade remedy may the importing country investigate?
Legislation for anti-competitive and unfair trade practices
Medium
A.A voluntary export subsidy
B.A currency transaction tax
C.A patent renewal fee
D.An anti-dumping duty
Correct Answer: An anti-dumping duty
Explanation:
Anti-dumping rules permit an investigation and possible duties when below-normal-value imports materially injure a domestic industry.
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38Two major competitors propose a merger that would leave one firm controlling most of the national market. What is the competition authority's central concern?
Legislation for anti-competitive and unfair trade practices
Medium
A.Whether the new brand enters foreign markets
B.Whether the merger reduces competitive pressure
C.Whether employees receive new identification cards
D.Whether the firms use identical accounting software
Correct Answer: Whether the merger reduces competitive pressure
Explanation:
Merger review focuses on whether the transaction may substantially lessen competition, increase market power, or harm consumers.
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39A dominant digital platform requires sellers to buy its advertising service as a condition for accessing the marketplace. Which concern is most relevant?
Legislation for anti-competitive and unfair trade practices
Medium
A.Permissible seasonal discounting
B.Abusive tying by a dominant firm
C.Routine customs valuation
D.Lawful independent product innovation
Correct Answer: Abusive tying by a dominant firm
Explanation:
Conditioning access to one service on purchasing another may constitute unlawful tying when a dominant firm uses market power to restrict competition.
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40An exporter receives a government subsidy tied directly to each unit exported, and the subsidized imports injure producers in the destination country. Which response may be available after investigation?
Legislation for anti-competitive and unfair trade practices
Medium
A.A countervailing duty
B.A domestic income-tax credit
C.A private licensing royalty
D.A consumer loyalty rebate
Correct Answer: A countervailing duty
Explanation:
A countervailing duty may offset the injurious effect of qualifying foreign subsidies after the required investigation establishes subsidy and injury.
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41A multinational firm relocates production to a country with weaker labor and environmental regulation. The move lowers prices for consumers and creates employment, but the firm also receives tax concessions that reduce public revenue. Which assessment best reflects a socially responsible globalization strategy?
Globalization with social responsibility
Hard
A.Reject the relocation because operations should remain in the home country
B.Proceed only after aligning practices with stronger international standards
C.Accept the relocation because employment gains outweigh regulatory concerns
D.Proceed because host governments alone determine acceptable business conduct
Correct Answer: Proceed only after aligning practices with stronger international standards
Explanation:
Social responsibility requires evaluating economic gains alongside labor, environmental, fiscal, and community impacts. International firms should avoid exploiting regulatory weaknesses.
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42A company publishes an annual sustainability report showing reduced emissions per unit of output, while total emissions rise because production has doubled. Which conclusion is most defensible?
Globalization with social responsibility
Hard
A.The company has shown mixed performance requiring absolute-impact analysis
B.The company has improved sustainability because efficiency increased
C.The company has no responsibility because emissions are legally permitted
D.The company has failed because total emissions increased
Correct Answer: The company has shown mixed performance requiring absolute-impact analysis
Explanation:
Lower emissions intensity indicates efficiency gains, but rising total emissions may increase overall harm. Responsible evaluation must consider both relative and absolute impacts.
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43A global apparel brand discovers that its supplier complied with local law but used recruitment agents who charged migrant workers illegal debt-like fees. What is the most appropriate corporate response?
Globalization with social responsibility
Hard
A.Shift responsibility entirely to the recruitment agents involved
B.Terminate the supplier immediately without assisting affected workers
C.Require repayment, remediation, and controls over recruitment intermediaries
D.Take no action because the supplier obeyed local employment law
Correct Answer: Require repayment, remediation, and controls over recruitment intermediaries
Explanation:
Responsible sourcing extends beyond formal supplier compliance. The firm should remediate worker harm and address the contracting structure that enabled exploitation.
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44A corporation funds schools in a host community but pressures local authorities to approve a project without meaningful consultation. Which principle is most clearly violated?
Globalization with social responsibility
Hard
A.The principle that philanthropy substitutes for stakeholder participation
B.The principle that host governments cannot regulate foreign corporations
C.The principle that community consent cannot be replaced by charitable spending
D.The principle that social investment eliminates all business obligations
Correct Answer: The principle that community consent cannot be replaced by charitable spending
Explanation:
Corporate social responsibility includes respecting affected stakeholders and procedural fairness. Donations do not legitimize decisions made without meaningful participation.
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45A firm adopts a global code of conduct that exceeds local legal requirements but permits exceptions where compliance would materially reduce competitiveness. What is the principal weakness of this policy?
Globalization with social responsibility
Hard
A.It applies identical standards across culturally different markets
B.It makes core obligations conditional on commercial performance
C.It treats voluntary commitments as binding international treaties
D.It prevents the firm from adapting products to local preferences
Correct Answer: It makes core obligations conditional on commercial performance
Explanation:
A credible responsibility code should establish non-negotiable minimum standards. Broad competitiveness exceptions can turn ethical commitments into discretionary promises.
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46A supplier classifies workers as independent contractors, although it controls their schedules, tools, methods, and remuneration. Which ethical concern is most significant?
Ethical dimensions of labor conditions
Hard
A.The classification is acceptable if workers signed individual contracts
B.The classification is ethical whenever workers receive market wages
C.The classification matters only when the supplier operates internationally
D.The classification may conceal an employment relationship and evade protections
Correct Answer: The classification may conceal an employment relationship and evade protections
Explanation:
Substantive control over work often indicates an employment relationship. Formal labels should not be used to avoid minimum wages, benefits, safety duties, or collective rights.
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47A factory meets the statutory minimum wage, but excessive unpaid overtime is necessary for workers to reach a subsistence income. Which judgment is strongest?
Ethical dimensions of labor conditions
Hard
A.The arrangement is unethical only if the factory exports its products
B.The arrangement is ethical if overtime is technically voluntary
C.The arrangement is ethical because the statutory wage is satisfied
Ethical labor analysis goes beyond legal compliance. Coercive economic conditions and unpaid overtime can undermine genuine consent and human dignity.
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48A multinational audits a supplier twice a year, but workers are coached to provide approved answers during announced inspections. Which control would most effectively improve ethical assurance?
Ethical dimensions of labor conditions
Hard
A.Increase the number of announced inspections
B.Use unannounced visits and confidential worker interviews
C.Require suppliers to submit more written compliance statements
D.Limit audits to payroll and production records
Correct Answer: Use unannounced visits and confidential worker interviews
Explanation:
Coached responses undermine announced audits. Independent, confidential, and unpredictable verification is more likely to reveal retaliation, wage violations, or unsafe conditions.
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49A buyer imposes a sudden 20% price reduction on a supplier while maintaining the same delivery schedule, then penalizes the supplier for excessive overtime. What is the buyer's ethical responsibility?
Ethical dimensions of labor conditions
Hard
A.Complete responsibility, because buyers control every supplier decision
B.Shared responsibility, because purchasing practices contributed to the risk
C.Limited, because price reductions are normal in global procurement
D.None, because labor management belongs exclusively to the supplier
Correct Answer: Shared responsibility, because purchasing practices contributed to the risk
Explanation:
Suppliers remain responsible for labor practices, but unrealistic prices and deadlines can create predictable pressure for abuse. Responsible procurement must address those incentives.
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50A country legally permits workers under age 16 to perform nonhazardous part-time work, but a global company prohibits all employment below age 16. Why might the stricter rule be ethically justified?
Ethical dimensions of labor conditions
Hard
A.It guarantees that no child in the country performs any work
B.It creates a clear global threshold and reduces verification ambiguity
C.It eliminates the need to investigate working conditions
D.It proves that local governments are unable to protect workers
Correct Answer: It creates a clear global threshold and reduces verification ambiguity
Explanation:
A stricter global standard can reduce loopholes and simplify monitoring, provided it does not worsen household vulnerability without offering remediation or support.
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51A mining project produces essential minerals for renewable technologies but threatens a watershed used by downstream communities. Which decision framework is most ethically appropriate?
Ethics and the environment
Hard
A.Compare lifecycle benefits, irreversible risks, alternatives, and affected rights
B.Approve it because renewable-energy benefits automatically outweigh local harms
C.Approve it if the company pays taxes and obtains an operating license
D.Reject it because every environmental risk makes extraction unethical
Correct Answer: Compare lifecycle benefits, irreversible risks, alternatives, and affected rights
Explanation:
Environmental ethics requires broader impact assessment. Aggregate climate benefits do not automatically justify severe, irreversible, or unjustly distributed local harms.
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52A company purchases carbon offsets for emissions from its supply chain, but the offset project may have occurred without the company's payment. What is the primary ethical problem?
Ethics and the environment
Hard
A.The offsets are invalid because supply-chain emissions cannot be measured
B.The offsets are sufficient whenever they are cheaper than direct abatement
C.The offsets may lack additionality and overstate the climate benefit
D.The offsets are unethical because all climate projects reduce employment
Correct Answer: The offsets may lack additionality and overstate the climate benefit
Explanation:
Additionality asks whether the reduction would have occurred without the offset funding. Without it, the company may claim benefits it did not cause.
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53A manufacturer moves a highly polluting process to a country with weaker enforcement while advertising a reduction in domestic emissions. Which ethical characterization is most accurate?
Ethics and the environment
Hard
A.Regulatory arbitrage that shifts harm rather than reducing it
B.Genuine sustainability because domestic emissions are lower
C.Environmental neutrality because the total product output is unchanged
D.Fair globalization because pollution follows comparative advantage
Correct Answer: Regulatory arbitrage that shifts harm rather than reducing it
Explanation:
Relocating pollution without reducing lifecycle emissions is not genuine environmental improvement. It transfers risks to communities with weaker protection.
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54A firm evaluates a factory using a discount rate that makes environmental damage occurring decades later appear economically insignificant. Which ethical criticism is strongest?
Ethics and the environment
Hard
A.Discounting is always invalid in environmental decision-making
B.The analysis may undervalue future generations and long-term harms
C.A higher discount rate always produces more sustainable investment
D.Future environmental effects should be ignored because they are uncertain
Correct Answer: The analysis may undervalue future generations and long-term harms
Explanation:
Heavy discounting can make delayed or irreversible damage appear trivial. Ethical analysis should consider intergenerational equity and uncertainty, not only present financial value.
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55A firm markets packaging as "biodegradable" because it decomposes in industrial facilities, although most consumers lack access to those facilities. What is the most appropriate conclusion?
Ethics and the environment
Hard
A.The claim is acceptable because the material eventually decomposes somewhere
B.The claim is ethical if competitors use similar environmental language
C.The claim is harmless because packaging has no effect after purchase
D.The claim is misleading unless disposal conditions are clearly disclosed
Correct Answer: The claim is misleading unless disposal conditions are clearly disclosed
Explanation:
Environmental claims must reflect reasonably expected real-world conditions. Omitting the specialized disposal requirement can create a materially misleading impression.
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56Two competing firms independently adopt identical prices after observing each other's public price announcements. There is no direct communication. Which issue requires the most careful legal analysis?
Legislation for anti-competitive and unfair trade practices
Hard
A.Whether competition law applies only to private communications
B.Whether identical prices are always evidence of price fixing
C.Whether public announcements automatically immunize coordination
D.Whether parallel pricing alone proves an unlawful agreement
Correct Answer: Whether parallel pricing alone proves an unlawful agreement
Explanation:
Parallel conduct is not necessarily illegal by itself. Authorities typically examine plus factors, market structure, communications, and conduct inconsistent with independent decision-making.
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57A dominant digital platform requires sellers to use its payment service and ranks its own products above equally relevant rival products. Which legal concern is most plausible?
Legislation for anti-competitive and unfair trade practices
Hard
A.Predatory pricing because the platform owns inventory
B.Ordinary vertical integration with no possible competitive effect
C.Export dumping because sellers operate across borders
D.Potential leveraging and self-preferencing by a dominant firm
Correct Answer: Potential leveraging and self-preferencing by a dominant firm
Explanation:
A dominant platform may unlawfully use control over access or ranking to favor its own services and disadvantage rivals, depending on jurisdiction and effects.
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58A firm sells a product abroad below its home-market price, but the price reflects lower transport costs and materially different customer demand. Which conclusion is most defensible regarding dumping?
Legislation for anti-competitive and unfair trade practices
Hard
A.Dumping exists only when the exporter earns a domestic profit
B.Dumping cannot occur when transport costs differ between markets
D.Dumping requires comparison using an appropriate normal-value benchmark
Correct Answer: Dumping requires comparison using an appropriate normal-value benchmark
Explanation:
Dumping analysis compares export price with an appropriate normal value while accounting for differences affecting price comparability. A simple price difference is insufficient.
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59A company advertises a temporary discount but keeps the product at the discounted price continuously, while suggesting that customers must buy immediately to avoid a higher price. Which unfair-trade concern is strongest?
Legislation for anti-competitive and unfair trade practices
Hard
A.The practice is lawful whenever the discounted price is profitable
B.The practice may be deceptive reference pricing and false urgency
C.The practice is anti-competitive only if a rival files a complaint
D.The practice is acceptable because consumers can compare alternatives
Correct Answer: The practice may be deceptive reference pricing and false urgency
Explanation:
A fictitious former price or continuously renewed deadline can mislead consumers about the value and scarcity of the offer, even when the current price is genuine.
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60A large manufacturer temporarily prices below average variable cost in a regional market where a smaller rival is financially vulnerable, then raises prices after the rival exits. Which additional fact would most strengthen a predatory-pricing case?
Legislation for anti-competitive and unfair trade practices
Hard
A.The smaller rival previously charged a higher retail price
B.The firm has a credible plan to recoup losses after exit
C.The manufacturer operates factories in several countries
D.The product has many close substitutes in the short term
Correct Answer: The firm has a credible plan to recoup losses after exit
Explanation:
Below-cost pricing may be competitive or promotional. Evidence of likely recoupment through later supracompetitive prices strengthens the predation theory.
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