Chapter 1
What is business ethics?
Moral principles guiding business decisions.
Utilitarianism is based on what?
Consequences.
What is a stakeholder?
Someone affected by a company.
What determines price?
supply and demand.
What is pollution?
Harmful substances in environment.
What is distributive justice?
Fair distribution of resources, benefits, and burdens in society.
Ethics is different from what?
Law, religion, feelings, or culture
which ethical theory holds that moral standards are true only relative to what a particular culture accepts — making cross-cultural moral criticism logically impossible.
ethical relativism
Name 3 internal stakeholder.
Employees / managers / shareholders.
What is equilibrium?
Where supply equals demand.
What is resource depletion?
Using resources faster than they renew.
What happens when supply exceeds demand?
Prices fall
First step in ethical decision-making?
Identify the issue.
Name 4 types of justice
Distributive / Corrective / Retributive / Restorative.
Name 3 external stakeholder.
Customers / community / government.
What is perfect competition?
Many buyers and sellers.
What is polluter pays principle?
Polluters pay for damage.
What is 3 key difference between monopoly and perfect competition?
Monopoly has one seller; perfect competition has many
one is high barrier, the other is low
one is a price maker, the other a price taker
What does utilitarianism focus on?
Outcomes (greatest good).
What does ethics of care focus on?
Relationships and empathy
What is CSR?
Corporate Social Responsibility.
Why is perfect competition considered ethically “ideal”?
It maximizes efficiency, fairness, and voluntary exchange.
What is sustainable development?
Meeting present needs without harming future.
What is the CSR pyramid?
Economic, legal, ethical, philanthropic responsibilities.
What does the rights approach protect?
Individual rights
What is the Golden Mean?
The balance between two extremes:
What are the 4 CSR levels and their benefits?
Economic, Legal, Ethical, Philanthropic
Benefits are building trust
Why does monopoly create distributive injustice?
It allows firms to charge higher prices and transfer wealth from consumers to producers.
Why is environmental harm considered both an economic and ethical issue?
Because it affects efficiency (costs) and fairness (who bears the harm).
Why is perfect knowledge important in markets?Give example
It allows informed and fair decisions
What is justice approach?
Fairness and giving people what they deserve.
What is System 1 thinking?
Fast and emotional thinking.
What is stakeholder model?
Balancing all interests.
What is oligopoly?
Few firms dominate market.
What ethical limitation does the anthropocentric approach have?
it values nature only for human benefit, ignoring intrinsic ecological value.
Can a monopoly ever be efficient, and what kind of justice is it?
Yes (economies of scale), distributive justice
What is virtue ethics about?
Moral character
What is System 2 thinking?
Slow and logical thinking.
What is shareholder model?
Focus on profit only.
Name 3 anti-competitive practice.
Price fixing / collusion / exclusive dealing.
What are the 3Ps?
People, Planet, Profit.
Are all stakeholders equally important?
No
What is corporate governance?
System controlling and directing a company.
What was the Ford Pinto issue?
They chose profit over human life
Rawls's difference principle
inequalities in wealth and power are just only if they satisfy this condition.Rawls argued that principles of justice should be chosen from behind this — a hypothetical condition in which you don't know your race, wealth, or abilities in the society those principles will govern.
What is price fixing?
Firms secretly set prices together.
what is justice40 Initiative
commits that at least this percentage of federal climate and clean energy investment benefits will flow to disadvantaged communities that have historically borne the greatest pollution burdens.
A company lowers prices to destroy competitors. What is this called?
Anti-competitive behavior