Question 1

Failure to disclose the dangers of a diet program is an ethical issue.

Accepted Answer

Failing to disclose potential dangers of a diet program can harm the individuals who participate in it, and not providing adequate information is a breach of ethics. It is important to give full and accurate information to people about the program's potential risks and benefits so they can make an informed decision about whether or not to participate.

Question 2

The Cornell researchers did not have a conflict because the funding for their lung cancer research did not come directly from the tobacco companies.

Accepted Answer

The source of funding can still create a conflict of interest if it indirectly benefits or is associated with tobacco companies, as it may influence the research outcomes or perceptions of bias.

Question 3

With respect to #4, it is not necessary for the company to take any action to correct the problem or refund money for those who already own the new calculator.

Accepted Answer

Companies typically have a responsibility to address issues with their products, which may include correcting the problem or offering refunds to affected customers.

Question 4

Intentional breach of a contract carries a legal remedy, but it is also unethical.

Accepted Answer

Intentional breach of contract is not only a violation of legal obligations but also undermines the trust and integrity that forms the basis of business relationships. Therefore, intentionally breaching a contract is both illegal and unethical.

Question 5

The failure to correct a known defect in a product is both an ethical lapse and a basis for a negligence claim.

Accepted Answer

Failing to correct a known defect in a product can be considered unethical because it puts consumers at risk of harm. Additionally, it can serve as a basis for a negligence claim in civil court because the manufacturer had a duty to provide a safe product and failed to do so by not addressing a known defect.

Question 6

The failure to disclose material information in negotiations is an ethical breach.

Accepted Answer

It is generally considered unethical to withhold material information in negotiations as it can lead to an unfair advantage for one party and undermine the integrity of the negotiation process. Full disclosure of material information is considered a fundamental requirement of ethical negotiation practices.

Question 7

Long-term relationships create ethical and legal obligations between the parties through conduct and accommodations.

Accepted Answer

Long-term relationships, whether personal or professional, often lead to ethical and legal obligations between the parties involved. This may occur through the conduct of the parties, promises made during the course of the relationship, or accommodations made for the benefit of the other party. These obligations may vary depending on the nature of the relationship and applicable laws, but they can be significant and have legal consequences if breached.

Question 8

Telling a customer he needs repair work done on a vehicle when the vehicle is in fine condition is unethical and misrepresentation.

Accepted Answer

It is unethical and dishonest to misrepresent the condition of a vehicle and recommend unnecessary repairs to a customer. This is a form of fraud and can lead to legal repercussions.

Question 9

The Red Cross disclosed that 9-11-01 funds would be used for administrative purposes.

Accepted Answer

The Red Cross stated that all donations specified for 9-11-01 victims would be used for their intended purpose, not for administrative costs. However, there were later reports of mismanagement and controversy surrounding the allocation and use of funds.

Question 10

How much money had Intel spent developing the Pentium chip?
A)$150 million
B)$500 million
C)$600 million
D)$1 billion

Accepted Answer

Intel spent approximately $1 billion developing the Pentium chip, showcasing the company's significant investment in advancing microprocessor technology.

Question 11

What error did Intel discover in its Pentium chip in July 1994?
A)That the chip was contaminated
B)That there was a floating point error that caused errors in division calculations
C)That the chip could cause computer viruses
D)None of the above

Accepted Answer

Intel discovered a floating point error in its Pentium chip in July 1994 that caused errors in division calculations. This led to a public relations crisis for the company and resulted in costly recalls and replacements of the faulty chips.

Question 12

Checking the books and records of an organization is one method for establishing the legitimacy of its claims.

Accepted Answer

Checking the books and records of an organization can provide evidence of its financial activities and can help verify the legitimacy of its claims.

Question 13

Nonprofits have fallen victim to widespread Ponzi schemes.

Accepted Answer

Nonprofits have been targeted and victimized by Ponzi schemes, just like any other sector. Some well-known examples include the Bernie Madoff scandal, which involved many nonprofit organizations, and the case of the National Heritage Foundation, which was shut down by the government after evidence of a Ponzi scheme was discovered.

Question 14

What did Intel discover when it ran tests on the Pentium chip?
A)That it would make an error once every 27,000 years
B)That the chance of an error was one in 9 billion
C)That the floating point error problem was not one that required attention
D)a and b only
E)a, b and c

Accepted Answer

Intel discovered that the Pentium chip would make an error once every 27,000 years (option A) and that the chance of an error was one in 9 billion (option B). However, they initially believed that the floating point error problem was not one that required attention (option C) until it became a public relations disaster. Therefore, options A and B are true and option C is only partially true, so the best choice is D.

Question 15

Nonprofits are permitted to use raised funds in any manner they deem acceptable.

Accepted Answer

Nonprofits are subject to strict regulations and are required to use funds in accordance with their stated mission and for the benefit of the public. There may be legal restrictions on how funds can be used and organizations must be transparent about their use of funds to maintain their nonprofit status.

Question 16

The Red Cross CEO resigned in protest over the use of Red Cross funds.

Accepted Answer

This is true. Gail McGovern, CEO of the American Red Cross, resigned in 2021 in protest over the organization's use of donor funds for administrative costs instead of for disaster relief and aid.

Question 17

The withholding of material information in a contract relationship is an ethical issue as well as misrepresentation.

Accepted Answer

Withholding material information in a contract relationship can be seen as unethical as it is a form of misrepresentation. It can lead to one party being misled or disadvantaged in the agreement, and can damage the trust and integrity of the relationship. Therefore, it is important to disclose all relevant information during contract negotiation and drafting.

Question 18

Nonprofits and their boards need not be concerned with conflicts of interest.

Accepted Answer

Nonprofits and their boards should be very concerned with conflicts of interest to ensure ethical behavior and to maintain the trust of donors and the public. It is important to establish policies and procedures for identifying and managing conflicts of interest.

Question 19

Although you are not part of your company's engineering group, you have discovered a major flaw in the company's new paper-thin solar calculator.The calculator adds when the subtract button is pressed if there are more than three figures to the right of the decimal point.Since it is not your area, you should do and say nothing.

Accepted Answer

As a responsible employee, it is your duty to report the flaw to the relevant authorities in the company, even if it is not part of your job description or department. Ignoring the issue could lead to financial losses and harm the company's reputation.

Question 20

Taking advantage of a party in a contract situation due to the party's inexperience, and not due to any lack of disclosure on your part, is ethical.

Accepted Answer

Taking advantage of someone's inexperience is not ethical, regardless of whether you disclosed everything in the contract or not. It goes against the principle of fairness and could be considered predatory behavior. An ethical approach would be to ensure that all parties fully understand the terms of the contract and are able to make informed decisions.

Quiz 5: Ethics and Contracts