Quiz 2 Business Ethics

Which environmental statement is true?

An American consumer can cause more tropical rain forest destruction than a poor person living within the forest itself.

In 1972 Congress created one of the most important agencies for regulating product safety. This agency is the

Consumer Product Safety Commission.

Describe three problems with the regulatory approach to environmental protection.

First, pollution statutes and regulations generally require polluters to use the strongest feasible means of pollution control. Second, although universal environmental standards are fair in the sense that they apply to all equally, this very fact raises questions about their effectiveness. Third, regulation can also take away an industry's incentive to do more than the minimum required by law. No polluter has an incentive to discharge less muck than regulations allow. No entrepreneur has an incentive to devise technology that will bring pollution levels below the registered maximum. Finally, there's the problem of displacement costs resulting from industrial relocation or shutdown due to environmental regulations.

Explain the parable of the Tragedy of the Commons

Imagine villagers who allow their animals to graze in the commons, the collectively shared village pasture. Even though it is in the interest of each person to permit his or her animals to graze without limit on the public land, the result of doing so is that the commons is soon overgrazed, making it of no further grazing value to anyone.

Which statement is true from an ethical perspective

The argument for strict liability is basically utilitarian.

Which of the following is an example of price gouging?

a New York hotel tripling its room prices after 9/11.

The case of FTC v. Standard Education was important in the legal transition

away from the reasonable-person standard.

The philosopher Tom Regan

claims that no one could approve of the treatment of animals in factory farms if they knew what was going on.

People generally speak of two kinds of warranties. What are these two kinds of warranties?

express and implied

To properly protect consumers

if a product poses a potential, serious threat, a company may need to take extraordinary measures to ensure contained safe use of it.

The moral theorist William T. Blackstone claims that right to a livable environment.

is a fundamental human right.

Some environmental regulations (like forbidding the burning of coal in cities) benefit each and every one of us because the air we all breathe is cleaner. If a company ignores the regulation and burns coal, while others obey the regulation, than the company

is being a free-rider

The terms "best, finest, and most" are examples of

puffery.

Which of the following is a drawback to the regulatory approach?

regulation can take away an industry's incentive to do more than the minimum.

In deciding whether an ad is deceptive, today the FTC basically follows

the "modified" gullible-consumer standard.

Due care is

the idea that consumers and sellers do not meet as equals and that consumer's interests are practically vulnerable to being harmed by the manufacture.

Advertising is best known for

the persuasion to purchase the product.