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

Accepted Answer

The concept of Homo economicus assumes that individuals are perfectly rational and capable of making optimal decisions in their own self-interest. In reality, actual people are less than perfectly rational and may not always pursue their own self-interest.

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

Accepted Answer

Market outcomes are influenced by the levels of skill, knowledge, resources, and other factors that traders or market participants possess. These differences can result in uneven outcomes as individuals with more advantages often secure better deals than others. The unequal distribution of resources and power, such as wealth and political influence, can also lead to unequal outcomes in the market.

Question 3

The internal workings of firms are founded on____________.
A) markets
B) agents
C) roles
D) relationships

Accepted Answer

The internal workings of firms are founded on relationships, as they involve interactions and collaborations among employees, departments, and stakeholders to achieve organizational goals.

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

Accepted Answer

The answer of A market with perfect competition would require____________.
A)...

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

Accepted Answer

Fraud is unethical because it involves deceit or concealment of information, which prevent all parties from having access to pertinent information. This goes against the principle of transparency, which is essential for building trust, ensuring fair play and making informed decisions.

Question 6

A market economy is based fundamentally on____________.
A) ethical motivations
B) the profit motive
C) human welfare
D) manufacturing

Accepted Answer

A market economy is primarily based on the profit motive, where individuals and firms make decisions based on self-interest and the pursuit of profit. This incentivizes innovation, efficiency, and competition, ultimately leading to economic growth and development. While ethical considerations and human welfare can play a role in market economies, they are not the driving forces behind decision-making. Manufacturing can be one aspect of a market economy, but it is not the defining characteristic.

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?

Accepted Answer

The answer of What is the difference between a fiduciary...

Question 8

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

Accepted Answer

The answer of What are the required components of the...

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

Accepted Answer

Professionals are recognized as experts in their respective fields due to their specialized knowledge and responsibilities. As such, they have an obligation to uphold certain ethical standards unique to their profession. These ethical requirements help ensure that professionals act with integrity, competence, and transparency, and honor their fiduciary duties to clients or others who rely on their expertise.

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

Accepted Answer

The ethical concept of dignity most centrally involves recognizing the intrinsic value of persons or other entities. This means acknowledging and respecting the autonomy and worth of every individual regardless of their status or attributes. Treating all persons equally and disclosing all information that is needed by others are also important ethical principles, but they are not the central elements of dignity. Behaving with high standards of virtue may be a manifestation of dignity, but it is not the same as the concept itself.

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

Accepted Answer

In a market economy, individuals may choose not to contribute towards the provision of public goods as they can still benefit from them without paying for them. This phenomenon is known as free-riding, making it difficult for the market to provide the optimal level of public goods. Therefore, B is the correct answer.

Question 12

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

Accepted Answer

The answer of What are the basic components of a...

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

Accepted Answer

A fiduciary is a person or institution that has a special responsibility of trust and confidence to act in the best interest of another person or institution. In this context, a fiduciary has the special responsibility to care for another's financial interests, which means acting honestly, ethically, and with the utmost good faith. It does not necessarily involve selling goods, providing information, or taking a professional interest in another's success.

Quiz 2: Ethical Decision Making

The difference between Homo economicus and actual people is that____________.

Market outcomes lead to unequal outcomes mainly because____________.

The internal workings of firms are founded on____________.

A market with perfect competition would require____________.

Fraud is unethical because____________.

A market economy is based fundamentally on____________.

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

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

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

The ethical concept of dignity most centrally involves____________.

A market economy alone cannot sustain public goods because____________.

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

A fiduciary has the special responsibility to____________.