394 final

Question 1

moral phil

relativism

example

Answer 1

there is no absolute right or wrong, but we can say acts are morally acceptable if they conform to _your society’s _approved practices

leads to conventionalism → it is right to do whatever immediate social environment dictates, ex. bribery by walmart in mexico

MNCs can have conflicting moral standards

we focus on absolute principles that are supposed to hold across all social settings

Question 2

moral phil

consequentialism

limitations, example

Answer 2

acts are good if they have good consequences;
“the right thing to do is whatever will produce the best state of affairs all things considered.”
doesn’t necessarily agree on what is a “good” outcome; what outcomes count; whose wellbeing is to be maximized?

ex. surgeon’s dilemma: murder healthy traveler to give organs to 5 dying patients

Question 3

moral phil

egoism, ethical egoism, objectivism, and psychological egoism

what did ayn rand say about ethical egoism?

Answer 3

egoism: acts are good if they benefit me; subjective

ethical egoism: moral agents should do what is in their self-interest, ayn rand says that individual ethics create value in society; of you give up your individuality and act for others, you lose the value you contribute to society

objectivism: when individuals act for others, it’s normally for an ideology (communism, religion); more rational to act for yourself

psychological egoism: self-interest is what motivates people in fact

Question 4

2 main arguments for ethical egoism

adam smith and ayn rand

Answer 4

adam smith: when we each pursue our own self-interest, we are collectively better off.
when we try to help others, it is unsatisfactory bc we invasively impose our own preferences and charity is degrading and debilitating

ayn rand: individual ethics create value in society; of you give up your individuality and act for others, you lose the value you contribute to society

Question 5

arguments against egoism

Answer 5

• scientific evidence that the evolutionary success of humans is due to cooperation and altruism, to a large extent
• psychological egoism in the extreme form is not consistent with the data
• insurance/sympathy → bad luck (health, natural disasters) is an imp determinant of wellbeing; do we really want to be so cold-hearted as to not care about the unfortunate?
• in prisoner’s dilemma situations, egoism makes both parties worse off than they might be under cooperation

Question 6

moral phil

utilitarianism

Answer 6

acts are good if they can be expected to raise the sum of human welfare

everyone’s happiness counts equally

Question 7

problems for the utilitarian

Answer 7

• involuntary sacrifices
• justified torture
• equal treatment of innocent and guilty, family and strangers
• breaking promises, lying for the greater good
• white lies → acceptable
• monetizing everything, even life itself

Question 8

4 rules of moral phil

golden rule

problems

Answer 8

do unto others as you would have others do unto you

problems:
1. differences in preferences
2. acts where there is no other (ex. gluttony)
3. the problem of the lenient law enforcer

Question 9

4 rules of moral phil

kant’s 1st rule, the categorical imperative

process?

Answer 9

act according to principles that are universalizable (applicable to everybody)

1. state: state the action you are considering
2. generalize: devise a general guiding principle that would underlie the decision
3. universalize: imagine a universal law where everyone in all circumstances would act according to the principle
4. rationalize: if no rational person would ever want to impose the law, then you have a moral duty not to do the action, regardless of the consequences

Question 10

questions about the categorical imperative, rule utilitarianism, act utilitarianism

Answer 10

questions:
* can I lie to the inquiring murderer?
* how conditional and complex can my universal laws be?
* how do I decide what rules a rational person would make into universal laws?

rule utilitarianism: obey moral rules, which if universally followed, would maximize social welfare; sometimes there are exceptions
* the consequences of the act might be to lower total utility but everyone following the rule raises total utility

act utilitarianism: considers 1 action at a time

Question 11

4 rules of moral phil

kant’s 2nd rule, the practical imperative

principle of autonomy, example

Answer 11

do not treat people purely as a means, in any way that violates their autonomy
* principle of autonomy: informed consent; no deception, no coercion
* ex. human hotspot

Question 12

4 rules of moral phil

ethics of care

main philosopher?

Answer 12

act according to duties of care; moral action depends on interpersonal relationships, duties of care within our relationships determine our morality

rational and deontological philosophies are seen to be born out of masculine values of competition and domination

main philosopher: feminist gilligan

Question 13

to establish a rule, it must satisfy:

deontological moral philosophy?

Answer 13

universality — i want everyone to follow that rule
reversibility — the rule should apply to me
the duty to follow a moral rule establishes a right to expect the rule to be followed by everybody

rights-based (deontological) moral philosophy: the duty to follow a moral rule establishes a right to expect the rule to be followed by everybody > canadian rights and legal system

Question 14

CSR

milton friedman

3 takeaways

Answer 14

1. a manager’s duty as an employee and an agent of the principal overrides their alleged social responsibilities.
2. pursuing social responsibilities other than profit maximization is a form of taxation without representation
3. pursuing profit leads to pareto efficiency (invisible hand)

Question 15

CSR

milton friedman says that corporate activity that aims to help the community but reduces profits is:

+ counters

Answer 15

undemocratic bc these decisions should be made through democratic process (the political system)
* counter → but shareholders are well-informed and vote → so it is democratic
unwise because a business person has no expertise to identify and fix social problems
* counter → firms know much more about their product and process than any gov regulator
ineffective because a manager that acts contrary to profit maximization might be fired or have customers desert to a less scrupulous firm
* counter → not if shareholders and consumers endorse the firm’s goal

Question 16

CSR

friedman ignores:

arrow

Answer 16

the mkt failure issue; arrow emphasizes 2 types of mkt failure in the presence of which profit max fails to yield efficient results
* negative externalities → pollution
* asymmetric info → the firm knows more than the customer abt the quality of the product, and knows more than the worker abt the safety of the workplace
ex. cars and pharma, mining

Question 17

potential solutions to mkt failure

6

Answer 17

• regulation: production standards, maximum emission levels, safety inspections, comp policy
• taxes and subsidies: tax pollution, subsidize abatement
• legal responsibility: damage suits or “torts”; legislation for labour and consumer protection
• gov-produced goods when there are public goods or externalities: defense, healthcare, education
• industry-led solutions: guarantees, warranties, voluntary labeling
• social responsibility: moral obligations to obey ethical codes

Question 18

CSR

corporate social responsibility, shared value, ESG investing

examples

Answer 18

corporate social responsibility — the responsibility of business to the environment, its stakeholders, and to the broader society

shared value — where firms benefit financially from CSR initiatives
* some firms (ex. those w consumer brands) find it easier to create shared value than others
* ex. unilever project shakti; trained women to sell in rural communities
* unintended consequences: put local businesses out of business
* ex. arc’teryx ponchos for the homeless

ESG investing — where investors invest in equities of firms that score highly on an ESG index; imp means of incentivising firms to engage in CSR

Question 19

CSR

greenwashing, triple bottom lines, stakeholder theory

Answer 19

greenwashing — firms appear socially responsible but without having much impact

triple bottom lines – people/planet/profit; firms expand their obj beyond just making money to include having a positive impact on the env and the community

stakeholder theory — firm should act in all stakeholder interests, not just shareholders

Question 20

CSR

how do we encourage firms to be more socially responsible?

Answer 20

consumer responsibility: depends on willingness to spend, informational symmetry
improve informational quality → certification, accounting, packaging

Question 21

CSR

porter’s justifications for CSR

4

Answer 21

1. moral obligation — companies have a moral duty to do the right thing
2. sustainability — companies should operate in ways to secure long-term economic performance by avoiding detrimental short-term behaviour → aligns with triple bottom line
3. freedom to operate — pragmatic approach where companies look to satisfy stakeholders → common in mining, chemicals, etc; needs to engage w the community so that people would want to work for them
4. reputation — social impact can be hard to determine, as well as the benefit to firms

Question 22

CSR

strategic integration

needs what?

Answer 22

• companies should strategically integrate CSR initiatives that affect society with the impact that society has on the firm
• need more integration between business + society
  decisions made by business should consider society, and decisions made by society should consider business
• everyone making decisions together, not meeting in the middle

Question 23

politics

mkt capitalism, monopoly, mkt socialism, state-directed socialism

Answer 23

mkt capitalism: private ownership, decentralized (competition)

monopoly: private ownership, centralized (planning)

mkt socialism: public ownership; decentralized

state-directed socialism: public ownership, centralized

Question 24

political systems

democracy, republic, monarchy (constitutional/absolute), communism, despotism

Answer 24

• democracy — citizen participation in the political system → leaders normally elected
• republic — gov subject to the people and leaders can be recalled; often democratic but can also be with monarchy (crowned republic)
• monarchy — monarch is the head of state; constitutional = like Canada, absolute = kingdom
• communism — system based on ideology of communism, often combined w a centrally planned economic system
• despotism — rule by an individual (autocracy or dictatorship) or a group of individuals (oligarchy)

Question 25

politics

if liberal economists were kings, then:

Answer 25

there would be minimal deadweight loss
* where there was no mkt failure there would be no interventions → distortionary taxes, subsidies, price floors and ceilings, quotas
* where there was mkt failure, corrective policies would be in place → taxes on bads, subsidies for abatement

the only deadweight loss would be from
* taxes needed to finance transfers to the poor
* disincentives associated w the safety net → unemployment insurance, disaster relief

but real world policies differ

Question 26

normative analysis, government failure

Answer 26

normative analysis → describes what should be implemented as policy based on theories of economics and fairness
* indiv or small group interests can outweigh normative justifications

government failure — when a government acts in a way contrary to what normative analysis prescribes

power corrupts people

Question 27

politics

healthy democracies require:

Answer 27

an educated electorate — to understand political, economic, and social issues
* misinformation facilitated by tech and AI → can threaten
* need media literacy, though some don’t care and just want info to confirm their beliefs

a free press
an independent judiciary — to ensure politicians are held accountable

Question 28

challenges for democracy

liberal democracy rests on 3 distinct sets of rights:

Answer 28

1. property rights — to protect owners and investors from expropriation
2. political rights — ensures that groups that win electoral contests can assume power and choose policies
3. civil rights — to guarantee equal treatment before the law and equal access to public services such as education

Question 29

illiberal democracy (partial/empty democracy), direct/pure democracy, representative democracy

Answer 29

illiberal democracy —while elections take place, citizens are cut off from knowledge about the activities of those who exercise real power bc of the lack of civil liberties

direct/pure democracy — direct voting by indiv. citizens on alternatives

representative democracy — involves the election of delegates who are vested with the power to vote on alternatives and who represent the interests of individuals they represent

Question 30

problems with direct democracies

Answer 30

• expense: everyone incurs costs to voting on every issue
• expertise/specialization: voters may lack expertise to judge some issues, and it is costly to become fully informed
• aggregate preference problems: voting does an imperfect job of revealing aggregate preferences bc it does not account for differences in the intensity of individual preferences > why median voter theorem is not normatively sound

Question 31

politics

Hotelling’s theory of political parties, median voter theory + assumptions + limitations

what do “left” and “right” correspond to?

Answer 31

centralist parties capture the most of the votes in two-party systems; parties approach the centre by gradually moving from an extreme position
* assume that votes are uniformly distributed across the spectrum
* each of the 2 parties wants to maximize its votes/chances of winning

median voter theory — policy platforms will closely match the preferences of the median voter
* “left” often corresponds to people who emphasize distributional fairness
* “right” often corresponds to emphasis on efficiency and procedural fairness

fails to take into account the multidimensionality of issues and the presence of other parties

Question 32

median voter theory

what happens when there is a 3rd party?

Answer 32

new eqm has all the candidates spaced out a bit

Question 33

electoral systems

majoritarian system, plurality system, proportional system

Answer 33

majoritarian system — winning candidate must have an absolute majority of the votes (>50%)
* alternative vote and run-off/second round voting systems are majoritarian

plurality system — the winning candidate should receive more votes than any other candidate
* each party puts forth 1 candidate to represent them in each riding
* people elect of the party reps to represent their riding

proportional system – ensures a fairly close relationship between the popular vote a party receives and the number of candidates it elected

Question 34

dominated winner paradox

Answer 34

51% of the electorate in 51 ridings favour the liberal party
100% of the electorate in the remaining 49 ridings favour the conservatives
liberal party wins
ex. 2016 US election, 2021 Canada election

Question 35

problems w modern democracies

parties can influence the electoral process by:

Answer 35

• gerrymandering — manipulating the boundaries of an electoral constituency so as to favour one party
• voter suppression — discouraging or preventing specific groups of people from voting, ex. using new laws to restrict voting access, typically justified by alleging voter fraud
• vote manipulation — installing partisan officials who can manipulate vote counting

Question 36

politics

advantages to the plurality system + proportional representation

Answer 36

• encourages fewer, larger, and more inclusive political parties
• tends to produce majority governments
• maintains a direct link between a local rep and their constituency
• is simple to use and understand
• however the alternative of proportional representation reduces strategic voting, gives smaller parties more representation, and is arguably fairer

Question 37

rent-seeking/transfer-seeking + effect on DWL

consequences, examples

Answer 37

process of using resources to redistribute wealth from others, rather than create new wealth, using up resources in the process; can add to DWL of a policy → ex. lobbying for a monopoly

consequences:
* transfer of wealth to the rent seeker from society
* resources consumed in rent-seeking are wasted from a social POV
* policy induced by rent-seeking usually has a pure waste associated with it → efficiency is compromised

examples:
* theft and other economic crimes
* litigation, financial mkt activity → insider trading, patent wars
* business lobbying
* war over resources
* charity → beneficial transfer seeking

Question 38

types of special interest groups, benefits of lobbying

Answer 38

economic interest groups (EIG) — represent unions, industries, professions, regions; EIGs lobby a mix of info and inducements to politicians → campaign contributions, future jobs
* resources used by EIGs to obtain transfers from others is a transfer-seeking cost

social interest groups — promote particular values or moral views, ex. MADD

benefit of lobbying → gives gov info about what ppl want → free flow of info is good → why it’s legal

Question 39

lobbying, principles of the lobbying act

Answer 39

occurs when an indiv. is paid to communicate with a public-office holder in an attempt to influence gov policy

principles of the lobbying act:
1. free and open access to govt is an imp matter of public interest
2. lobbying public office-holders is a legitimate activity
3. it is desirable that public office holders and the public be able to know who is attempting to influence govt
4. the system for the registration of paid lobbyists should not impede free and open access to government

if you restrict access to financing campaigns, then gov becomes detached from citizens

to what extent should political parties be allowed to be funded by private interests?

Question 40

env policy

what is the optimal amount of pollution?

Answer 40

eliminating all the pollution would eliminate production + consumption, leading to a loss of social welfare

Question 41

abatement

Answer 41

tech that reduces a negative externality
generally underprovided by the private sector bc it doesn’t benefit them unless they are part of the transaction
ex. installation of scrubbers, waste treatment, carbon capture, utilization and storage (CCUS)

Question 42

solutions to environmental externalities

Answer 42

1. property rights, or internalizing the externality via unified ownership (mergers)
2. legal remedies (torts) and regulation, ex. quantity controls or standards
3. taxes on polluting activities
4. subsidies for abatement tech
5. creation of a market → tradable permits allocate pollution rights that can be priced and traded (“cap and trade”)
6. social responsibility, utilitarian ethics

Question 43

env policy

cap and trade

Answer 43

• finds MB = MC of pollution and divides pollution / Q of permits
• gov can reduce DWL associated with pollution by setting a maximum overall amount and issuing pollution permits
• like a quota, but firms can trade their pollution rights
• incentivises pollution reduction as firms that can easily reduce emissions can do so and sell their permits
• diff options for initial allocations, however increases efficiency regardless of initial dist option (auction, grandfathering)
• makes sense when firms differ in their marginal benefits and costs of emission

Question 44

env policy

explain how pigovian taxes work

challenges, when it’s not effective

Answer 44

make t=x so that PMC rises to SMC
​
but it can be difficult to measure x
​
tax will not be effective if demand is inelastic (lack of substitutes) and there are often fairness issues (relatively high costs to low income earners)
​
BC carbon tax is very progressive → rose from $10/ton (2008) to $30/ton in 2012 → cabron emissions have reduced by 10%

Question 45

local vs global pollution, how to respond to global externalities

Answer 45

local: particulate air pollution
cross-border: acid rain
global: CFCs and GHGs
with global externalities, even rational govts may set taxes too low
to respond to global externalities we usually need global agreements → protocols

Question 46

population model

formula

Answer 46

• entity reproduces without competition
• with more of the entity, there is more reproduction
• crowding effects kick in: newborn entities must compete with large existing entity stocks for survival
• eventually the stock of entities reaches its maximum size where growth is zero → carrying capacity
• the # of indiv graph is cubic; the derivative (rate of growth) curve is negative parabolic; the peak is the the carrying capacity

G/S = r - rS/K
G = rS(1 - S/K)
growth curve plotting G vs S is a parabola. the apex is where the change in growth amount is 0

Question 47

population model

harvest, harvest equilibria

Answer 47

when G > H, S goes up
when G < H, S goes down

harvesting H1 at SH is stable bc if there is a shock that reduces stocks, G > H and the eqm will self-restore.

harvesting H1 at SL is unstable bc if there is a shock, G < H and the stock will be driven to extinction

harvesting H2 at M (carrying capacity) is semistable bc if there is a shock, G < H and the next period’s stock will fall again unless the harvest is dramatically reduced

Question 48

env policy

factors affecting harvest choices

Answer 48

• intrinsic growth rate
• how big/common are the shocks and how good/costly is the monitoring?
• is it economic to use the resource?
• harvesting costs high, demand low
• is it economic to save the resource
• harvesting costs low, current value very high, growth rate low → should we fully deplete it?
• cyclical management: we might want to overharvest some years and under harvest other years

Question 49

env policy

tragedy of the commons, open access problem

explain grand banks of newfoundland

Answer 49

the tragedy of the commons — lack of property rights leads to an over-use of a common resource

open access problem — with resources that are common goods, there is over-harvesting

grand banks: depleted cod harvest to 0;
* tragedy of the commons: overgrazing by countries of a shared resource
* open access problem: harvests are hard to control if preventing access and policing is difficult or impossible
* info problems: we didn’t know the size of the resource or its shocks
* transfer-seeking: atlantic canada lobbies for greater fishing quotas, spanish fishermen fishing canadian waters (stealing)

Question 50

env policy

sustainable standard of living (Hartwick’s rule)

Answer 50

sustainable standard of living (Hartwick’s rule) — requires investments in productive assets to make up for resource depletion
* keeps citizens from falling into poverty when natural resource
* reinvest profits generated by resource extraction into other forms of capital
* ex. Norway’s Government Pension Fund Global is funded by Norway’s oil export revenue → benefits all future gens, worth $1.3tr in 2021
* Alberta Heritage Savings Trust Fund has just $17bn

Question 51

env policy

thomas malthus, malthusian trap

have we escaped the malthusian trap?

Answer 51

population grows geometrically whereas food production increases arithmetically; population grows until it can’t feed itself
* war, pestilence, and famine act as restraining mechanisms

have we escaped the malthusian trap?
* birth rates lower due to improved healthcare, nutritions, educated parents, etc
* tech improvements to food production
* better institutions to prevent war
* not as profitable to invade other countries for wealth → today’s wealth is in equities that are widely held around the world
* medical developments to reduce disease

Question 52

env policy

solutions to over-capacity: prophets and wizards

economic incentives + prisoner’s dilemma involved

Answer 52

prophets: william vogt, “apocalyptic environmentalism”
* william vogt and the modern environmental movement: only reducing consumption and limiting population will save us
* affluence is not our greatest achievement, but our biggest problem
* unless we change, the unavoidable result will be environmental destruction
* cut back, cut back

wizards: norman borlaug, “techno optimism”
* norman borlaug and the green revolution: science and technology, properly applied, will save us
* green movement of the 1960s: high-yielding crop varieties and agrononomic techniques increased grain harvests, averting 10s of millions of deaths in india and pakistan in the 1960s
* only getting richer and more knowledgeable will resolve our environmental crises
* innovate, innovate

economic incentives for firms to develop technology → need profit
prisoner’s dilemma → if everyone cuts back, then we’ll be better off, but individuals don’t want to do that

Question 53

env policy

not in my back yard, public bads

Answer 53

bads — waste, hazardous materials, and other undesirable materials

NIMBY — relatively small number who live near a toxic waste dump bear high costs, meanwhile the benefits accrue to a much larger but spread out group who are far from the waste site
* locate waste where it generates the lowest costs; those who bear those costs should be compensated by the rest
* in practice, the political struggle over where to place bads can yield outcomes that are inefficient, unfair, or both

Question 54

env policy

when can policy solve problems? how do international laws complicate this?

Answer 54

policy can only solve problems if it’s possible to assign property-rights, levy taxes, impose standards/quotas, internalize externalities, or provide public-good (removal of public-bad) services

however, there is no international government; there is often transfer-seeking by countries, particularly given that monitoring is difficult. many global problems are prisoner’s dilemma situations, where all countries would be better off if they cooperated but each country acting in their own interest makes everyone worse off.

Question 55

env policy

1987 montreal protocol

Answer 55

• 1987 montreal protocol: 24 countries pledge to cut CFCs by 50% by 1998
• atmosphere should regenerate to pre-1985 levels by 2050
• it is possible to come together as a global community and solve env problems!

Question 56

env policy 3

evidence of climate change

7

Answer 56

global temp rise, warming oceans, shrinking ice seets, glacial retreat/decreased snow cover, sea level rise, ocean acidification, extreme events

Question 57

env policy 3

socioeconomic consequences of climate change

Answer 57

poor people will be disproportionately affected, esp. equator and those close to sea level

economic migration → strain on countries’ ability to support vulnerable populations

Question 58

env policy 3

sectors responsible for GHGs

Answer 58

spread out among all of them; land use, waste disposal, power, agriculture, transportation, fossil fuel processing/retrieval/dist, commercial

Question 59

env policy 3

by fairness standards, who should bear the costs of climate change?

Answer 59

the countries that pollute the most

Question 60

env policy 3

tipping point, albedo effect, examples of feedback loops

Answer 60

tipping points – thresholds that make a system change from one to another qualitative state

albedo effect — global warming → melts ice → less reflection → more radiation absorption → more global warming

feedback loops: albedo effect, changing ocean circulation, changing air circulation, threatened large-scale ecosystems

Question 61

env policy 3

problems with the kyoto protocol and paris agreement

Answer 61

no penalties for noncompliance, can withdraw

Question 62

env policy 3

solutions to climate change, according to Mann

Answer 62

• allow renewables to compete fairly with fossil fuels by removing oil/gas subsidies
• widespread carbon pricing
• debunk false arguments
• combat climate doomism