Moral Issues Exam 2

Advertising is best known for

the persuasion to purchase the product

Socialism is an economic system characterized by public ownership of property and a planned economy

true

Karl Marx believed that

under capitalism workers are alienated in several ways

A basic premise of Adam Smith's is

we can secure what we need from others only by offering them something they need from us

Which of the following do proponents of the broader view of corporate social responsibility believe?

Businesses have other obligations besides making a profit

Which statement best describes capitalism

Capitalism is an economic system that operates under the profit motive.

Which of the following consumer goods is responsible for the greatest number of individual social ills?

Cigarettes

The concept of the "invisible hand" means

Each person's private pursuit of wealth will result in the most beneficial overall organization and distribution of economic resources

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

False

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

False

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

True

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

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

Outsourcing is a practice where companies buy parts or whole products from other producers

True

Statistics indicate that the faith consumers place in manufacturers is often misplaced.

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

Which of the following is an example of price gouging?

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

For years, Bayer aspirin advertised that it contained "the ingredient doctors recommend most." This is an example of

concealment of facts

The best statement to describe corporations is

corporate culture can be both explicit and implicit

Corporations are limited-liability companies which means that

corporate shareholders are liable for corporate debts only up to the extent of their investments

The case of MacPherson v. Buick Motor Car in 1916 changed product liability law. As a result of it, the courts

expanded the liability of manufacturers for injuries caused by defective products

Capitalism operates on the debatable assumption that human beings find increased well-being through

greater material consumption

To properly protect consumers,

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

Business must be sensitive to its impacts on the physical environment primarily because of the

interdependence of an ecosystem's elements

The term ecology refers to the science of the

interrelationships among organisms and their environments

Cost-benefit analysis

involves value judgments and factual uncertainties

Legal paternalism is the doctrine that the law

may justifiably be used to restrict the freedom of individuals for their own good

Which of the following historical stages of capitalism came first?

mercantile

The profit motive

must be checked by competition if society is to benefit

A common point of contention about corporations is

philosophers and business theorists disagree whether corporations are moral agents

One of the four key features of capitalism is

private property

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 the corporate world, the board of directors will

rubber stamp the policies and recommendations of the management

Advertising

subsidizes the media

In Citizens United v. Federal Election Commission, the U.S. Supreme Court ruling included

support for corporations' First Amendment right to participate in the political process

The "tragedy of the commons" is

that individual pursuit of self-interest can sometimes make everyone worse off