Deck 8: Incentives and Compliance

Question 1

Which of the following is not part of Walmart's stated environmental goals?

A)To use 100% by renewable energy
B)To create zero waste
C)To sell products that sustain resources and environment
D)To buy only from ecologically friendly and certified suppliers

Answer 1

D

Question 2

Behavioral economics has shown that subtle nudges to human behavior

A)are highly unethical.
B)are generally ineffective.
C)are most effective in developed countries.
D)can have dramatic effects.

Answer 2

D

Question 3

According to Richard Thaler,all nudging should be ________ and ________.

A)efficient; used for the common good
B)transparent; efficient
C)transparent; used for the common good
D)well intentioned; efficient

Answer 3

C

Question 4

Plastic bags are made from oil,and the habitually getting bags with purchases uses approximately ________ gallons of oil each year.

A)5.6 million
B)1.6 billion
C)6 billion
D)No estimate can be made.

Question 5

Those who support _________ enforcement of society's interests believe that coercion is the only way to ensure firms will behave in a way that is socially acceptable.

A)voluntary
B)mandatory
C)firm-specific
D)industry-wide

Question 6

An argument against the mandatory enforcement of society's interests is that

A)mandatory enforcement of society's interests never works.
B)no government regulations have ever been successful in altering negative behaviors.
C)research has shown that voluntary compliance with society's interests is more successful.
D)the state does not have sufficient resources to control every aspect of life.

Question 7

Walmart's global supply chain and growing international sales make it a living laboratory for studying corporate social responsibility because

A)it has progressive employee relations practices.
B)it is widely unionized.
C)it is the largest business in the world.
D)it is willing financially to support CSR researchers studying the firm.

Question 8

The belief that excessive regulation is a distraction and an added cost to business reflects the perspective of those who support ________ compliance with society's interests.

A)voluntary
B)mandatory
C)firm-specific
D)industry-wide

Question 9

According to the textbook,the accusation that Walmart puts "mom-and-pop" stores out of business is

A)a fair and legitimate criticism of Walmart because of the many stores that have closed after Walmart enters a town.
B)a fundamental misunderstanding of basic economics.
C)misleading because of the equally important rise in e-commerce companies,such as Amazon.
D)an unfair criticism because of the additional jobs that Walmart brings to rural areas.

Question 10

The "Walmart paradox" refers to the fact that Walmart is

A)criticized as being bad for society while also being the largest company in the world.
B)a leader in both sustainability and supply chain management.
C)known for squeezing the margins of its suppliers as well as paying low wages.
D)constrained by both societal stakeholders and company shareholders.

Question 11

The goal of behavioral economics is to explain human action in terms of ________ rather than ________.

A)theoretical assumptions; empirical examination
B)empirical examination; theoretical assumptions
C)profit maximization; profit optimization
D)profit optimization; theoretical assumptions

Question 12

Nudges incorporate the biases that inform our decisions into policies that encourage ________ social outcomes,while still retaining the ________ of choice.

A)optimal; illusion
B)profitable; possibility
C)optimal; certainty
D)questionable; illustion

Question 13

Alan Greenspan,former chair of the US Federal Reserve,has long been recognized as

A)an advocate of voluntary self-regulation of financial firms.
B)an advocate of mandatory government regulation of financial firms.
C)an advocate of eliminating government interventions in business.
D)an advocate of increased regulation at the state level and decreased regulation at the federal level.

Question 14

Behavioral economics combines economic theory and human psychology to

A)account for the irrational manner in which humans make decisions.
B)determine the best process for maximizing profit in a firm.
C)account for the rational manner in which humans make decisions.
D)understand the desires of people living in bottom-of-the-pyramid (BOP)countries.

Question 15

Walmart has been criticized for all but which of the following?

A)Paying wages that are too low
B)Squeezing margins of suppliers
C)The negative impact on rural downtowns
D)Reducing its retail prices

Question 16

As the manager of a grocery store,you place chocolate and candy near the checkouts so that children will pester their parents to buy these products when parents are most distracted.What is this an example of?

A)Unethical marketing behavior
B)Stakeholder manipulation
C)Nudge economics
D)Marketing economics

Question 17

The policies related to the use of plastic bags at IKEA and in Ireland demonstrate that

A)consumer practices are very difficult to change.
B)well-designed policies can incentivize humans to change their behavior radically and quickly.
C)consumers generally prefer plastic bags over paper bags.
D)the use of plastic bags is a relatively insignificant issue in the most of the world.

Question 18

Approximately _______ of all Americans live within 15 miles of a Walmart.

A)25%
B)50%
C)75%
D)90%

Question 19

Which of the following is NOT an example of the Walmart paradox?

A)Walmart employees complain about low wages even though there are routinely more job applicants than openings available.
B)Suppliers complain that their margins are continually squeezed but compete fiercely to supply Walmart with its products.
C)Regulators complain that the state has to subsidize the low wages and benefits Walmart pays its employees while they welcome the jobs Walmarts provides.
D)All of these are examples of the Walmart paradox.

Question 20

As a city manager,you are interested in decreasing littering in city parks.You strategically place colorful footprints leading to trash cans.What is this an example of?

A)Creative marketing
B)Stakeholder manipulation
C)Nudge economics
D)Environmental marketing

Question 21

Is behavioral economics more or less applicable in public policy than in private,for-profit business settings?

Question 22

As a leader in environmental sustainability initiatives,Walmart is

A)sacrificing profits to satisfy other stakeholder concerns.
B)prioritizing environmental causes over shareholder concerns.
C)giving in to powerful environmental lobbies.
D)becoming more efficient in order to pass lower costs on to customers.

Question 23

Walmart's position regarding CSR has evolved drastically in the last decade.

Question 24

After customer complaints in the United States about its "no plastic bag" policy,IKEA reversed its policy and began using plastic bags again.

Question 25

Imagine that you are a manager of a grocery store.Analyze how you could use behavioral economics to improve your business.In your answer,provide examples of policies you should incorporate as well as avoid in your application of behavioral economics.

Question 26

Walmart's shift in policy toward sustainability is remarkable.

Question 27

An analysis of Walmart's corporate social responsibility practices suggests that the firm's stakeholders have very little influence in shaping corporate actions.

Question 28

The establishment of the US government's Social and Behavioral Sciences Team reflects the growth of

A)collaboration between government and private industry.
B)government intrusion into all aspects of life.
C)stakeholder interests across all areas of society.
D)nudge economics.

Question 29

Walmart is today considered a market leader on sustainability.

Question 30

Which argument do you favor-persuading a company to incorporate a CSR perspective voluntarily or using legislation to force it to change? Why? Which of these two compliance approaches is ideal? Which is more realistic?

Question 31

Which of the following provides an alternative to the voluntary versus mandatory debate?

A)Stakeholder theory
B)Governmental deregulation
C)Behavioral economics
D)Investor activism

Question 32

Which of the following is a potential result of government-established mandates?

A)Stifling of entrepreneurship
B)Encouragement of inefficency
C)Avoidance of potentional disasters
D)All of the above

Question 33

Understanding what Walmart does and why it does it is integral to understanding the role of corporate social responsibility in business today because

A)Walmart is an essential part of the global economy.
B)Walmart has a long history of very negative CSR practices.
C)Walmart has a long history of very positive CSR practices.
D)Walmart is a leader in sustainability efforts.

Question 34

Researchers found that placing fresh milk at the front of the counter and chocolate milk toward the back

A)had no impact on schoolchildren's selection of milk.
B)had an impact on schoolchildren's selection of milk.
C)had a negative impact on schoolchildren's attitudes about nutritious foods.
D)had an impact on schoolchildren's selection of milk as well as fresh vegetables.

Question 35

After the Irish government passed a 33-cent tax on every plastic bag used,

A)consumers protested to such a degree that the law was reversed.
B)firms that produce plastic bags attempted to have the law repealed.
C)carrying plastic bags became socially unacceptable.
D)the use of plastic bags decreased by only a small percent.

Question 36

In 2012,The New York Times exposed a scandal in which Walmart was

A)falsely reporting its environmental sustainability initiatives.
B)falsely reporting its hiring practices regarding women in management positions.
C)reducing the hours of employees to part-time in order to avoid paying for health insurance.
D)bribing Mexican officials to speed the granting of permits to open new stores.

Question 37

One principle that should inform the use of nudges is that opting out of the nudge should be very easy.

Question 38

Financial success for firms in the 21st century will increasingly be defined by those organizations that can foster the most symbiotic relationships with

A)government regulators.
B)financial institutions that can provide capital.
C)their stakeholders.
D)local communities.

Question 39

After the devastation of Hurricane Katrina in 2005,________ was/were the first source of relief for residents.

A)the federal government
B)Walmart
C)the state government
D)churches and charitable organizations

Question 40

Walmart argues that it provides valuable jobs to small communities and should be allowed to grow.Critics argue that these jobs are often low paying,with few benefits.What is your position? Is a low-paying job better than no job at all?

Question 41

What is the best way for businesses to achieve socially responsible behavior?