Test bank business ethics concepts and cases chapter 31

1.

What is an ideology in general? What are the two main types of ideologies relevant to business activity
in the U.S.?

2.

What are the distinctions between "free market" and "command" systems? What
components are necessary for each?

3.

How does Locke define the state of nature and the law of nature? How do these ideas lead to private
property rights and the limitation of governmental power?

4.

What four problematic assumptions does Locke make that might cast some doubt on his
defense of free market economies?

5.

How does Adam Smith defend free markets on utilitarian grounds? What should
government do, according to Smith, to advance the public welfare?

6.

Why do monopolistic industries, pollution, and concern for others present difficulties for
Adam Smith's theory?

7.

How did John Maynard Keynes criticize the free market economy? What does he claim is necessary
to maximize the social utility of the economic system? Why does stagflation present an obstacle to his
theory?

8.

Define Social Darwinism. How was Spencer's version of this idea modified to be less callous? What
are the basic problems with the idea?

9.

What are Marx's four forms of alienation? How does each form help to increase
inequalities of wealth and power?

10.

How does Marx reply to the utilitarian argument that without private property there would
be no incentive to work? Is his reply persuasive?

11.

What is substructure? Superstructure? How are these ideas relevant to the real purpose
of government?

12.

What does Marx mean by immiseration of workers? What three tendencies will help bring this about?
Why did immiseration not actually occur?

13.

What is a mixed economy? Why would society want to consider such a system? Does it work
anywhere in the world today?


14.

How do new technologies, such as computers and scientific breakthroughs, create
difficulties for systems of property ownership?

15.

According to Locke, the power of government should be:
a.
Expanded to meet the needs of all citizens.
b.
Expanded to meet the needs of corporations.
c.
Limited, extending only far enough to protect basic rights of all citizens.
d.
Limited, extending only far enough to protect the basic rights of corporations.

16.

Locke's view that labor creates property rights has been influential in the U.S.
a.
True
b.
False

17.

Modifying Locke's views on free markets, Adam Smith's arguments rest on __________
arguments that unregulated markets and private property will produce greater benefits than
any other system.
a.
Kantian
b.
Utilitarian
c.
Communist
d.
None of the above

18.

According to Smith, when private individuals are left free to seek their own interests in free
markets, they will inevitably be led to further the public welfare by an "invisible hand."
a.
True
b.
False

19.

Smith's utilitarian argument is most commonly criticized for making what some call
unrealistic arguments.
a.
Smith assumes that no one seller can control the price of a good.

b.
Smith assumes that the manufacturer will pay for all the resources used to produce a product.
c.
Smith assumes that humans are motivated only by a natural, self-interested desire for profit.
d.
All the above
e.
B&C

20.

Social Darwinists had a different take on the utilitarian justification for free markets. They
argued that economic competition would not produce human progress.
a.
True
b.
False

21.

The basic problem underlying the views of the social Darwinist is the fundamental
normative assumption that survival of the fittest means survival of the best.
a.
True
b.
False

22.

Karl Marx offers the most critical view of modern private property and free market

institutions. Marx claims that free-market capitalism necessarily produces:
a.
Extremes of inefficiency.
b.
Extremes of efficiency.
c.
Extremes of equality.
d.
Extremes of inequality.


23.

Many economists now advocate retaining the market system and private property while
modifying their workings through government regulation. This is known as a:
a.
Pure capitalist economy.
b.
Evolutionary economy.
c.
Mixed economy.
d.
Free market economy.

24.

According to the International Labor Organization, it is estimated that 218 million children
are working today.
a.
True

b.
False

25.

During the financial crisis in 2008, George W. Bush asked U.S. Congress to pass
legislation to create a Troubled Asset Relief Program (TARP) in the amount of ___________.
a.
$1 Trillion
b.
$90 billion
c.
$80 billion
d.
$70 billion

26.

Under TRIPS, patents for new products expire after 20 years.
a.
True
b.
False

27.

Ricardo looks to which rule setter to normalize trade?
a.
World Trade Organization
b.

World Bank
c.
International Monetary Fund
d.
B&C
e.
None of the above

28.

So called primitive societies used economic systems based on_______________.
a.
Small business organization
b.
Tradition –based societies
c.
Barter systems
d.
None of the above

29.

In decisions made in a system primarily based on markets
a.
Private companies make the main decisions about what they will produce and who will get it.
b.
Land and factories are owned and managed by private individuals.
c.
People are motivated to work primarily by the desire to get paid for voluntarily supplying the things
others are willing to pay for.

d.
All of the above.
e.
None of the above.


Test Name: chapter 3
1.
2.
3.
4.
5.
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7.
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10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.

24.
25.
26.
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28.
29.

c.Limited, extending only far enough to protect basic rights of all citizens.
a.True
b.Utilitarian
a.True
d.All the above
b.False
a.True
d.Extremes of inequality.
c.Mixed economy.
a.True
d.$70 billion
a.True
e.None of the above
b.Tradition –based societies
d.All of the above.