Question 1

Economic reasoning describes how we____________.

Accepted Answer

A)  ought to reason 
B)  prioritize our desires 
C)  reason when pursuing our goals 
D)  would reason if we could have whatever we wanted C

Question 2

What fact does the "ultimatum bargaining game" demonstrate?

Accepted Answer

A)  It is often rational to price products below their market value. 
B)  Free markets will usually self-regulate. 
C)  Many people do not understand economics. 
D)  Many people would rather not trade than be treated unfairly. D

Question 3

Describe and explain an example of a business decision that would be unethical even though it is legal.

Accepted Answer

An example of a business decision that would be unethical even though it is legal is the practice of price gouging during a natural disaster. Price gouging occurs when a business significantly raises the prices of essential goods and services, such as food, water, and shelter, in response to increased demand during a crisis.

While price gouging may be legal in some jurisdictions, it is widely considered unethical because it takes advantage of vulnerable individuals who are in desperate need of basic necessities. This practice exploits people's suffering for financial gain and goes against the principles of fairness and compassion.

Even though price gouging may be legal in certain circumstances, it is unethical because it prioritizes profits over the well-being of others. Businesses have a responsibility to act ethically and consider the impact of their decisions on the community, especially during times of crisis. Therefore, engaging in price gouging, even if it is legal, is an unethical business decision.

Question 4

Organization in business is characterized mainly by its____________.

Accepted Answer

A)  rules 
B)  hierarchy 
C)  profits 
D)  products

Question 5

Adam Smith's economic theory is based on which of the following assumptions?

Accepted Answer

A)  People want to promote each others' interests. 
B)  Morality is not relevant to economic concerns. 
C)  Free markets will fix their own ethical problems. 
D)  People will behave rationally as they pursue their interests.

Question 6

In many cases, rules of business ethics can be determined by____________.

Accepted Answer

A)  applicable laws 
B)  company guidelines 
C)  economic requirements 
D)  rules of conduct that apply in everyday life

Question 7

The school of thought that says that law and ethics govern two different realms is wrong because____________.

Accepted Answer

A)  ethics applies to every field of life 
B)  anything that is legal is also ethical 
C)  anything that is illegal is also unethical 
D)  the law governs every aspect of life

Question 8

Decision making in business occurs at various distinctive____________.

Accepted Answer

A)  places 
B)  levels 
C)  objectives 
D)  profits

Question 9

In what ways does it benefit businesses to pursue ethical choices beyond what they are legally required to do?

Accepted Answer

The answer of In what ways does it benefit businesses...

Question 10

It is not ethically sufficient to obey the law because____________.

Accepted Answer

A)  the law does not apply to business in general 
B)  ethical constraints sometimes require that the law be ignored 
C)  ethics goes beyond what can be legally codified 
D)  the law itself is stricter than ethics

Question 11

It is possible for there to be unethical actions that are not____________.

Accepted Answer

A)  illegal 
B)  wrong 
C)  avoidable 
D)  harmful

Question 12

What is economic efficiency, and in what ways might the pursuit of economic efficiency be unethical?

Accepted Answer

The answer of What is economic efficiency, and in what...

Question 13

The economic character of business can be seen in its____________.

Accepted Answer

A)  trading characteristics 
B)  ethical dimensions 
C)  personal aspects 
D)  legal guidelines

Exam 1: Ethics in the World of Business