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Exam 2: Business Ethics

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Question 31

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Which of the following is not a corporate characteristic?

A) A relatively small number of corporations own the great bulk of U.S. industrial wealth.
B) The great majority of publicly held corporations have audit committees consisting entirely of outside directors.
C) The board of directors of the majority of publicly held U.S. corporations consist mainly or entirely of inside directors.
D) Corporate governance requirements on publicly held corporations have been imposed by federal legislation.

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Question 32

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If a Middle Eastern culture and the American culture differ as to the morality of a particular action, under ethical relativism:

A) both cultures are correct.
B) the action should be assessed to determine whether the action produces more net pleasure compared with net pain.
C) a cost-benefit analysis should be conducted to determine the relative economic efficiency of the action.
D) the action should be viewed through a "veil of ignorance" to determine whether it is ethical.

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Question 33

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Which of the following is a common criticism of ethical relativism?

True cost-benefit analysis as a social theory,

Rule utilitarianism supports rules that, on balance, produce the greatest good.

Kohlberg believed that all people reach the third stage of moral development by adulthood.

An ethical decision-making approach that relies on a central authority or set of rules, such as the Koran or the Bible, is:

Discuss the arguments for and against businesses' involvement in socially responsible activities.

Define business ethics and give some examples of the types of situations in which ethical issues might arise in a business setting.

The "Television Test" is a test that is generally accepted by adherents of intuitionism.

What is unjust to a social egalitarian will also be unjust to a libertarian.

Harvard philosopher John Rawls stressed liberty as the most important obligation owed by a society to its members.

Neal is the young, likable, optimistic, and generous son of a prominent public official. He has a master's degree in business and is the business partner of Ken and Bill in an oil drilling and exploration business. Neal also serves as a director on the board of the Bonanza Savings and Loan Association. While serving on the Bonanza Board, Neal votes to approve major loans to Ken and Bill without disclosing to the other directors that he is a business partner of Ken and Bill. Neal also personally arranges for a $900,000 line of credit from Bonanza for an oil drilling venture in which he is a partner with Ken. The drilling venture is unsuccessful and Ken and Bill both default on their loans to Bonanza, which then causes the S & L to become insolvent. Federal banking officials seize Bonanza and liquidate its assets to pay creditors and depositors. Because Bonanza is federally insured, tax money is also used to pay off depositors whose deposits are insured under federal programs. Bonanza shareholders lose their investment money. Was Neal's conduct as a director of Bonanza ethical? Analyze his conduct in light of the following ethical theories: a. Intuitionism and the "Television Test." b. Milton Friedman's ideas on corporate governance. c. Deontological theories. d. Rule utilitarianism. e. Ethical relativism.

Corporations are subject to a higher standard of accountability than are public bodies.

The ethical theory of intuitionism proposes that:

The definition of business ethics includes which of the following points?

An auto designer chooses to devote his efforts to design an automobile that is the safest vehicle possible. He does so because he wishes to save lives and prevent disabling injuries. He believes he and his employer have a duty to provide the public with the safest possible vehicle. The designer's approach to ethical decision-making is best characterized as:

Compare the social ethics theories of distributive justice, libertarianism, and social egalitarianism. How are they alike? How are they different? Explain your answer.

Analyze whether telling a lie is unethical in terms of each of the following ethical theories: a. The deontological approach. b. Utilitarianism. c. Intuitionism and the "Television Test." d. Ethical relativism. e. Ethical fundamentalism.

Critics of business offer all but which of the following arguments to support their contention that business must help resolve societal problems?