Chapter 27: Environmental and ethical issues

All of the following are environmental impacts of business activity except:

1) release of pollution which may contribute to global warming

2) disposal of waste makes rivers less able to support fish

3) oil spills lead to sea bird deaths

4) increased car production increases employment

• 1

• 2

• 3

• 4

The best definition of the external cost of business activity is:

1) the costs to the rest of society not the business itself

2) the costs that have to be paid by the consumer not the producer

3) the costs that the government has to pay for not society

4) the costs of reducing pollution that the business pays for

• 1

• 2

• 3

• 4

One of the external benefits resulting from a business decision to open a new factory is:

1) the costs to the rest of society not the business itself

2) the increased output leads to increased profits

3) suppliers benefit from more choice and lower prices

4) the shops in the area benefit from residents’ increased incomes

• 1

• 2

• 3

• 4

One way in which businesses can contribute to sustainable development is:

1) using the cheapest raw materials available

2) recycling as much waste as possible

3) reducing the prices of products as much as possible

4) developing new products which are likely to have sustained demand

• 1

• 2

• 3

• 4

The best definition of a pressure group is:

1) competing firms that put pressure on a business to reduce prices

2) when a business encourages group work within its factories

3) people organising themselves to try to change business activities

4) groups of people who organise themselves to buy products in bulk from a business

• 1

• 2

• 3

• 4

Which one of the following factors is likely to lead to successful pressure group activity

against a business?

1) The pressure group is large and receives little publicity in newspapers

2) The pressure group’s activities are against the law

3) A consumer boycott organised by a pressure group has an immediate effect on sales

4) The business is profitable and has operations in several countries

• 1

• 2

• 3

• 4

Increased consumer awareness of environmental issues creates which one of the

following opportunities for business?

1) Waste can be easily dumped as long as consumers do not find out about it

2) Newly developed products from recycled materials could be highly demanded

3) Higher prices can be charged for products made from non-sustainable sources

4) Factory pollution will not be a problem for the business if the goods are made abroad

• 1

• 2

• 3

• 4

Legal controls that limit business activity from damaging the environment include:

1) pollution limits

2) banning products made from sustainable materials

3) making the advertising of recycled products illegal

4) making it illegal to make products that create more external benefits than external

costs

• 1

• 2

• 3

• 4

XYZ Co. has found out that one of its suppliers employs children to do dangerous

production work. The managers of XYZ do nothing about this. This is an example of:

1) putting profit before costs

2) putting ethics before profit

3) putting profits before ethics

4) putting publicity before profits

• 1

• 2

• 3

• 4

A large clothes retailer insists that all of its suppliers pay their workers good wages and

offers them decent working conditions. The most likely reason for this is:

1) the retailer wants to obtain supplies at the lowest possible price

2) the retailer is putting high profits before ethics

3) the retailer wants to maintain high ethical standards

4) the retailer is worried that consumers will not expect high ethical standards

• 1

• 2

• 3

• 4