Deck 2: Ethical Decision Making

Question 1

The difference between Homo economicus and actual people is that____________.

A) Homo economicus is capable of making any decision
B) Homo economicus pursues many different interests
C) actual people pursue their own self-interest
D) actual people are less than perfectly rational

Answer 1

D

Question 2

Market outcomes lead to unequal outcomes mainly because____________.

A) it involves random processes
B) participants have differing levels of skill
C) free markets are inherently unjust
D) there is government interference

Answer 2

B

Question 3

The internal workings of firms are founded on____________.

A) markets
B) agents
C) roles
D) relationships

Answer 3

D

Question 4

A market with perfect competition would require____________.

A) agents to not be rational
B) that there be no contracts
C) that ethics not be necessary
D) ethical guidelines to be legally codified

Question 5

Fraud is unethical because____________.

A) all parties must have access to pertinent information
B) no one may be permitted to profit too much
C) market economies require freedom of action
D) the market requires everyone to further their own interests

Question 6

A market economy is based fundamentally on____________.

A) ethical motivations
B) the profit motive
C) human welfare
D) manufacturing

Question 7

What is the difference between a fiduciary and an agent? What special obligations are characteristic of a fiduciary that is not an agent?

Question 8

What are the required components of the moral point of view, and how are they exercised in a business setting?

Question 9

The ethical requirements that are specific to professionals arise in part from .

A) their duty not to profit at others' expense
B) the implicit contract that they have with other professionals
C) the duties they owe to their governing association
D) their specialized knowledge and responsibilities

Question 10

The ethical concept of dignity most centrally involves____________.

A) treating all persons equally
B) disclosing all information that is needed by others
C) recognizing the intrinsic value of persons or other entities
D) behaving with high standards of virtue

Question 11

A market economy alone cannot sustain public goods because____________.

A) no one would want to take advantage of public goods
B) everyone would be free riders if they could be
C) people would try to sell each other public goods
D) participants in a market economy are imperfectly rational

Question 12

What are the basic components of a market system, and what assumptions are made about human behavior?

Question 13

A fiduciary has the special responsibility to____________.

A) care for another's financial interests
B) sell goods as efficiently as possible
C) provide as much information as possible
D) take a professional interest in another's success