PT131.S2.Q2

PrepTest 131 - Section 2 - Question 2

Show summary

Price: A corporation's primary responsibility is to its shareholders. ████ ███ ███ ████ █████████ ████████████ ███████ ████ ████ ███ ████████ ██████ ██ ███ ███████████ ████ █████████ ████ ████ █████ ███████████

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Speaker 1 Summary

Price says that a corporation’s primary responsibility is to its shareholders. Why? Because shareholders take the biggest risks. And what risks are those? Well, if the company goes under, the shareholders lose their investment.

Speaker 2 Summary

Albrecht says that a corporation’s primary responsibility should instead be to its employees. Why? Firstly, shareholders usually have many investments (meaning their risk in a single company isn’t all that great). Secondly, an employee’s entire livelihood is at risk if the company goes bankrupt. This implies that employees actually take a greater risk, making them a more important responsibility.

Objective

We need to find a disagreement between Price and Albrecht. They disagree about whether shareholders or employees take the greatest risks, and should therefore be a company’s primary responsibility.

Show answer
2.

On the basis of their ███████████ █████ ███ ████████ ███ █████████ ██ ███████████ █████ ███████

a

corporations have a ██████████████ ██ █████ ████████████

b

corporations are responsible ███ ███ ███████ ██ █████ █████████

c

means should be ████████ ███ █ █████████████ █████████ ██ ██████ █████ ██████ ██ ███ ███████████ ████ ████████

d

a corporation's shareholders ████ ████ ██ █████ ████ ██████ ████ ████ ██ ███ █████████████ ███████ ██ ███████

e

the livelihood of ████ ██ ███ ████████████ ███████ ██ ███ █████████████ ███████

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