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Phil312 Exam 3
Final exam will consists of 35 questions from this set, 10 from the second set,
| Question | Answer |
|---|---|
| 1. What is the standard view of the responsibility of the employees to the owners of a business? | All employees are agents hired by principals, and in that, they help the company advance. Creates a responsibility for the agent to act on behalf of or “For the Benefit Of” principal. “Fiduciary Duty” |
| 2. What is the standard view of the relation of managerial to non-managerial employees? | They are presumed to have no special expertise, need constant supervision by mgrs. (Master/Servant relationship) |
| 3. What does the fiduciary duty of agents to principals include under the common law tradition? | Loyalty, Trust, Obedience, Confidentiality to the Principals/Owners. |
| 4. Who are the "gatekeepers" in the free market system? | or Watchdogs: accountants, auditors, financial analysts. independent accounting agencies. |
| 5. What is the "cult of the shareholder"? | Upper level management in a corp being too narrowly focused on short term increases in their stock value. |
| 6. What is Ronald Duska's view of loyalty in the workplace? | that NO employees should EVER feel loyalty to a business. It is the willingness to sacrifice for those you have a mutually enriching relationship with, and businesses just operate for profit, not enrichment. Fits well with FMM |
| 7. What is Desjardins view of loyalty in the workplace? | Agrees with Duska on non-managerial employees but Loyalty is due from high level employees. Loyalties arise because mgrs are entrusted with powers to use FBO the owners. |
| 8. What is the view of contractual supererogation regarding loyalty in the workplace? | Over and beyond contract terms. Can be verbal or nonverbal. |
| 9. What is Albert Carr's view of honesty in the workplace? | A business is a game where the normal rules do not apply. eg. poker and bluffing |
| 10. What is a "whistle blower"? | an employee of a company that informs the public of what they believe to be unethical or illegal activity |
| 11. What is the motive issue with whistle blowers? | We would like to assume that most are motivated to protect others and want justice, but also recognize things like revenge, self-aggrandizement, envy as not so nice motives. |
| 12. What is the ignorance problem with whistle blowing? | Even a whistle blower acting with good intentions, maybe be ignorant of science; seeing something as harmful that may be not or seeing something as illegal that may not be. |
| 13. What is the harm issue with whistle blowing? | Bad publicity and defending itself against govt actions can greatly harm any company. |
| 14. What is the violation of privacy issue with whistle blowing? | Whistle Blowers are violating the privacy of owners, in which they often have agreed through contracts to respect. |
| 15. According to DeGeorge, under what conditions is whistle blowing permissible? | (1) The business practice presents a real threat or serious harm. (2) The WB should first try to work it out internally. (3) If possible, WB should exhaust those channels |
| 16. According to DeGeorge, under what conditions is whistle blowing obligatory (over and above those under which it permissible)? | (4) WB must have documented evidence that within reason convince others the company is doing harm. (5) WB must have good reason that blowing the whistle will prevent the harm. |
| 17. What is Sarbanes-Oxley? | - law passed after accounting scandals - tighten standards for publicly traded firms - 11 sections, req SEC to implement compliance - req independent auditors to do internal controls - req CEO/CFO to certify accuracy of reports |
| 17. What is Sarbanes-Oxley? (More) | - req auditor independence - bans most personal loans to execs/auditors - req increased reporting of insider training; bans it during blackouts. - increases criminal penalties - req permanent storage of emails, and other data. |
| 18. Barbara Hunter criticizes SarbOx for being draconian. What is her criticism? | The jail times it demands for fraud exceeds that required for armed robbery, assault with deadly weapon, negligent homicide. Yes, biz fraud often involves big sums of money, but little if any threat to life. she alleges unnecessary |
| 19. Barbara Hunter accuses Sarbox for creating a moving target for businesses. What is her criticism here? | She accuses the new regulatory agency of being able to change regulations at will, creating a moving target. She holds that it tilts the playing field in favor of big biz. |
| 20. What is the consistency criticism of SarbOx? | Leave it to those best equipped to do it. Let congress review while being presented both sides. Even if balance is agreed, law has more good than bad results. However, bills only cover biz, not govt. Govt commits same frauds as biz |
| 21. What are the 'Four P’s of Marketing" (marketing broadly defined)? | Product, Pricing, Promotion: includes marketing (narrowly) and sales, and Placement |
| 22. What does "products" refer to in marketing? | The product that is being sold to consumers. What responsibility do producers have for the quality and safety of their products? should some products just not be produced? |
| 23. What does “promotion" refer to in marketing? | Providing information about a product, advertising. Are deceptive or misleading ads immoral? Illegal? What limits should be placed on product ads?? Is marketing targeting the elderly or children ever moral? |
| 24. What does "placement" mean in marketing? | Where the product can be conveniently purchased by the consumer |
| 25. What does "Prima facie" mean? | At first glance |
| 26. What was the main harmful side effect and beneficial side effect of Thalidomide? | Harm: defective babies on pregnant women. Benefit: cured lepers |
| 27. Why is a voluntary exchange between autonomous individuals prima facie ethical afrom the egoist perspective? | Each gets what they want, or they wouldn’t trade, so each gets the best result |
| 28. Why is a voluntary exchange between autonomous individuals prima facie ethical from the utilitarian perspective? | Each gets what they want, and if nobody else is hurt, net happiness increases |
| 29. Why is a voluntary exchange between autonomous individuals prima facie ethical from the Kantian perspective? | Such an exchange respects autonomy of the individuals |
| 30. Why is a voluntary exchange between autonomous individuals prima facie ethical from the natural rights perspective? | Such an exchange, again if it hurts nobody else, flows from their rights |
| 31. Why is a voluntary exchange between autonomous individuals prima facie ethical from the virtue ethics perspective? | A community of people freely exchanging what they value builds prudence, trust, and peace |
| 32. What is the Easterlin Paradox? | Being richer but apparently not happier |
| 33. What is “affluenza"? | People get too much material goods are shallow and unhappy |
| 34. What is "product liability"? | Is that area of law in which manufacturers, distributors, retailers, and others who make products or render services for the public are held to account for the injuries their products/services cause. |
| 35. A "liability claim" in common law refers to what? | Allegation that someone was hurt by some product |
| 36. A claim of liability in law involves what four points? | 1) A duty owed 2) A breach or failure to perform that duty 3) An injury or tort 4) That the breach proximately caused the plaintiff’s injury |
| 37. What are the three types of negligence claims? | Design defect, manufacturing defect, marketing defect (failure to warn) |
| 38. What two areas of common law are most often used to pursue product liability cases? | Contract law and tort law |
| 39. What was the strict contractarian view regarding liability? | When a business sells a product, it is only liable for what is explicitly covered in the warranty |
| 40. What is a warranty? | Contract between a manufacturer or seller and consumer concerning a product |
| 41. What is the doctrine of implied warranty? | Consumer has expectation of what is to come; 1st shift (economic shift) |
| 42. What is the implied warranty of merchantability? | Consumer would not purchase a product if product would harm the consumer |
| 43. What is the implied warranty of habitability? | Consumer would not buy a product if it did not meet their need |
| 44. What was the doctrine of privity? | First evolution of tort law; 2nd shift; can only sue the direct seller |
| 45. What is strict product liability? | The doctrine that holds that the producer of a product should be fully liable for the harms caused by its product, regardless of whether it was negligent or careless in any way |
| 46. What is the trilemma argument for the doctrine of strict product liability? | There are only three alternatives as to who will pay for unforeseeable non-negligent harms: a) consumer, b) society generally, c) producer. Option (a) is cruel, option (b) seems to require socialized healthcare, option ( c) is the only option left |
| 47 . What is the jury accommodation argument for strict product liability? | Strict product liability accommodates a common jury practice, to force corporations to pay for medical expenses of individuals who otherwise cannot pay (tear jerker) |
| 48. What is the carefulness argument for strict product liability? | Strict product liability forces manufacturers to be more careful |
| 49. What is the fairness argument for strict product liability? | In any economic exchange, both sides should have rough equality. So if a manufacturer harms a consumer,it should pay to restore rough equality |
| 50. What is the (reverse) fairness argument against strict product liability? | Reverses the point about fairness: if a manufacturer did nothing wrong, isn’t it fair to make it pay? |
| 51. What is the cost argument against strict product liability? | Doesn’t strict product liability if carried out fully lead to escalating costs? And won’t it deter innovation-how can companies fully anticipate all possible future costs? What would Schumpeter say? |
| 52. What is "regulation" broadly defined? | Any legal mechanism designed to minimize harms caused by products or services |
| 53. What is "regulation" narrowly defined? | Regulatory rulings/laws (regulations narrowly so-called) |
| 54. What is rent-seeking? | When an individual, organization, or firm seeks to make money by manipulating the economic environment rather than by making a profit through trade and production of wealth. Often associated with government regulation than with land rents. |
| 55. What is the law of unintended consequences? | Actions of people, and especially of govt, always have effects that are unanticipated or "unintended." Unexpected results. Each cause has more than one effect and will include unforeseen effects. It is a call to decision makers to beware. |
| 56. What is regulatory drag? | Cost of economy, all businesses compiling with regulation |
| 57. What is regulation generally intended to do? | Intended to minimize harms caused by products or services-including: statutory laws, regulatory rulings/laws, expansion of tort, property and contract law. |
| 58. What is regulatory capture? | Political corruption. When Regulatory agency, created to act in the public interest, instead advances the commercial or special concerns of interest groups.Form of govt failure; creates an opening for firms to behave badly (e.g., negative externalities). |
| 59. What is the static model of pricing? | Noticed by Adam Smith. Supply and Demand model. |
| 60. What is the dynamic model of pricing? | Pricing is a language- an information transmission mechanism NOT a moral mechanism. The price of product P informs consumers, existing producers and innovators (potential producers) of how to govern their behavior. |
| 61. What is price fixing? | Producers collude to set prices above free market price. Clearly unethical, illegal by federal, state law. |
| 62. What is a monopoly? | A business or government action, one producer dominates a market completely. |
| 63. What two sorts of monopoly are ethical from the free market perspective? | 1. Natural monopoly: near total market share, by one producer, because of choice of accident 2. Government sanctioned monopoly. |
| 64. What is convenience pricing? | Price high, but seller gets it in free market bc has an angle: convenience. Certainly not illegal or unethical. |
| 65. What is price gouging? | Shortage caused by emergency which prevents consumers from going elsewhere. Unethical, typically illegal. Can be clear cases, but also borderline ones. |
| 66. What is dumping? | aka Predatory pricing: Sell temporarily below cost to achieve monopoly. |
| 67. What are loss leaders? | Sell one or two items below cost to entice customers in, but hope they buy other stuff at full price. NOT dumping bc don’t aim at monopoly and sell all other products at profit pricing. |
| 68. What was John Kenneth Galbraith's claim about the dependence effect? | Marketing is bad because it creates artificial demand. It puts the law of supply and demand on its head. |
| 69. What is the difference between secured and unsecured loans? | Secured loans are secured by an asset you own that they can take away from you. Like a car loan or a mortgage. Unsecured loans are those backed by your personal promise to pay and usually have a higher interest rate attached to them. |
| 70. What is the rational choice model? | Framework for understanding and often formally modeling social and economic behavior. |
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jp2592
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