Ethics in Business TRUE OR FALSE

According to Cambridge University biologist Andrew Balmford, the loss of nature's services is always outweighed by the benefits of development

false

According to Kenneth Arrow, trust and confidence are highly overrated in business.

false

The disparity between private industrial costs and public social costs is what economists call an "internality."

false

. In his essay "Social Responsibility and Economic Efficiency," Kenneth Arrow has argued that ethical behavior in the business world comes only at the expense of economic efficiency.

false

A psychological appeal is one that aims to persuade by appealing primarily to reason and not to human emotional needs

false

According to Jeremy Bentham, the question is not whether animals can feel pain, but whether they can talk and reason

false

According to William F. Baxter, we ought to respect the "balance of nature" and "preserve the environment" even if doing so brings no benefit to human beings.

false

According to law professor Christopher D. Stone, the relationship between corporate management and its shareholders is identical with the relationship between you and an investment advisor.

false

Advocates of a "naturalistic ethic" believe that penguins are important only because people like them.

false

Business is right to insist that accidents occur exclusively as a result of product misuse and that it is thereby absolved of all responsibility

false

Congress has now outlawed puffery

false

Economists favor legal paternalism because it prevents individuals from balancing safety against price.

false

Environmental protection is always a static trade-off, with a fixed economic price to be paid for the gains we want.

false

Externalities are the intended negative (or in some cases positive) consequences that two parties purposefully impose on an external third party.

false

In his books The Affluent Society and The New Industrial State, John Kenneth Galbraith argues that consumer wants determine what gets produced

false

In the 1960 case Henningsen v. Bloomfield Motors and the 1963 case Greenman v. Yuba PowerProducts, injured consumers were awarded damages based on their proving that the manufacturers of the defective products were negligent.

false

It is not logical for corporations to acknowledge that business should be conducted morally.

false

Legal paternalism is the doctrine that the law should not be used to restrict the freedom of individuals for their own good

false

Manuel Velasquez claims that the corporate internal decision structure of a corporation shows that a corporation can have both intentions and intentionality.

false

Recent studies have shown that neither corporate moral codes nor corporate culture affect whether individuals inside the corporation behave morally or immorally.

false

Regulation is always the most effective way to allocate the costs of environmental protection.

false

Strict liability is the same thing as absolute liability

false

Tampering with the ecosystem always has injurious effects.

false

Thanks to the EPA, the federal government long ago eliminated the problem of potentially harmful pesticides and other chemical residues in food.

false

The FTC now follows the reasonable-person standard in matters of advertising, sales and marketing.

false

The Fair Packaging and Labeling Act of 1966 empowers representative agencies to rank and list all ingredients in the order of decreasing percentage of total contents

false

The business-can't-handle-it argument is an argument in favor of a broad view of corporate responsibility.

false

The discussion of corporate moral agency also included discussion of corporate punishment and corporate internal decision structures

false

The international fishing industry as it exists today gives us good reason to reject the moral of Garrett Hardin's "Parable of the Commons."

false

The invisible-hand argument against broadening corporate responsibility says that business's appetite for profit should be controlled by the hand of the government.

false

The rising affluence of people in the United States has meant a corresponding decrease in pollution and its attendant environmental problems in the United States.

false

When advertisers conceal facts, they suppress information that is favorable to their products.

false

When it comes to protecting animal rights, the United States is far ahead of Europe.

false

William T. Blackstone rejects the idea that each person has a human right to a livable environment on the grounds that it is technically infeasible.

false

"Weasel words" are words used to evade or retreat from a direct or forthright statement

true

. The word "ecosystem" refers to a total ecological community, both living and non-living

true

A moral of Garrett Hardin's parable "The Tragedy of the Commons" is that there can be a difference between the private costs and the social costs of a business activity.

true

According to Joel Feinberg, future generations of people have a right to be born.

true

According to John Kenneth Galbraith, business's social role is purely economic and corporations should not be considered moral agents.

true

According to Keith Davis, in addition to considering potential profitability, a business must weigh the long-range social costs of its activities as well. Only if the overall benefit to society is positive should business act.

true

According to Melvin Anshen, the case for a broad view of corporate responsibility can be defended on the basis of there always being a kind of social contract existing between business and society.

true

According to Milton Friedman, business has no social responsibilities other than to maximize profits.

true

Adherents of the broad view of corporate responsibility claim that modern business is intimately integrated with the rest of society and that, as a result, although society expects business to pursue its economic interests, business has other responsibilities as well

true

Advocates of a naturalistic ethic contend that some natural objects are morally considerable in their own right, apart from human interests.

true

An ordinary example of an ecosystem is a pond.

true

Anti-paternalism gains plausibility from the view that individuals know their own interests better than anyone else and that they are fully informed and able to advance those interests.

true

Any equitable solution to the problem of who should pay the bill for environmental cleanup should take into account responsibility as well as benefit.

true

Before the case of MacPherson v. Buick Motor Car in 1916, injured consumers could only recover damages from the retailer of the defective product.

true

Business's responsibility for understanding and providing for consumer needs derives from the fact that citizen-consumers are dependent on business to satisfy their needs.

true

Companies should look at a code of ethics as more than just window dressing with more than just a vagueness that is so general it lacks substance.

true

Corporate internal decision (CID) structures amount to established procedures for accomplishing specific goals.

true

Corporations should welcome the outside opinions of society as a whole, local communities, customers, suppliers, employees, managers, and stockholders.

true

Cost-benefit analysis is a device used to determine whether it's worthwhile to incur a particular cost.

true

Defenders of advertising claim that, despite criticisms, advertising enjoys protection under the first Amendment as a form of speech

true

Due care is the idea that consumers and sellers do not meet as equals and that the consumer's interests are particularly vulnerable to being harmed by the manufacturer, who has knowledge and expertise the consumer does not have.

true

Externalities are the unintended negative (or in some cases positive) consequences that an economic transaction between two parties can have on some third party.

true

Legally a corporation is a thing that can endure beyond the natural lives of its members and that has incorporators who may sue and be sued as a unit and who are able to consign part of their property to the corporation for ventures of limited liability.

true

Limited liability" means that members of a corporation are financially liable for corporate debts only up to the extent of their investments.

true

Moral vegetarians are people who reject the eating of meat on moral grounds.

true

Most business observers agree with Berle and Means that, because stock ownership in large corporations is so dispersed, actual control of the corporation has passed to management.

true

One decisive case in the legal transition away from the reasonable-person standard in matters of advertising, sales and marketing was FTC v. Standard Education.

true

Strict product liability is the doctrine that the seller of a product has legal responsibilities to compensate the user of that product for injuries suffered due to a defective aspect of the product, even though the seller has not been negligent in permitting that defect to occur.

true

Subliminal advertising is advertising that supposedly communicates at a level beneath our conscious awareness

true

The Federal Trade Commission (FTC) was established over seventy-five years ago to protect consumers against deceptive advertising

true

The case of First National Bank of Boston v. Bellotti sharpened the legal distinction between corporations and individuals.

true

The controversy over legal paternalism pits the values of individual freedom and autonomy against social welfare

true

The doctrine of caveat emptor means that the law may be justifiably used to restrict the freedom of individuals for their own good

true

The idea that corporations will impose their values on us supports one of the arguments for the narrow view of corporate social responsibility.

true

The new discipline of "ecological economics" calculates the value of an ecosystem, not in terms of what people are willing to pay for it, but in terms of what it would cost to provide the benefits and services that the ecosystem now furnishes us.

true

The word "ecology" refers to the science of the interrelationships among organisms and their environment.

true

Three approaches have gained the most attention when it comes to achieving our environmental goals: the use of regulations, incentives, and pricing mechanisms.

true

What society finds to be useful and desirable is always brings profitability to companies.

true