exam 4

Question 1

Robert Nozick

Answer 1

Said the distribution of goods should be made, not by principle, but by a validity based upon antecedent events

Question 2

John Kenneth Galbraith

Answer 2

In a 1958 work titled “the affluent society” called attention to dependence creation through marketing

Question 3

John Rawls

Answer 3

Said that one should promote a society in which he or she would want to live regardless of his or her status at birth

Question 4

Adam Smith

Answer 4

Argued the collective good is maximized when each individual is allowed to pursue his or her own self-interest within the law

Question 5

Milton Friedman

Answer 5

____ said corporate officials, who do not try to make as much money for their shareholders as possible, within the law, undermine the foundation of our free society

Question 6

Passive Unethical Behavior

Answer 6

This involves the deliberate hiding of material financial or product information.

This involves not saying anything and taking advantage of someone’s assumptions

Question 7

Integrity

Answer 7

This involves the willingness to conduct oneself in accord with principles that promote fairness.

This involves one of the five principles in the CIMA code of professional conduct.

Question 8

Deception

Answer 8

This involves the creation of illusions.

This involves misleading language.

Question 9

Market failure

Answer 9

This involves the inability of a sales transaction to include the full cost of a good or service.

Awareness of this is one of the five forces behind contemporary model for CSR.

Question 10

Special purpose entity

Answer 10

This involves a limited partnership or company created to fund or manage risks.

Awareness of this helps us understand Enron’s downfall.

Question 11

This related to one of the basic ways one can violate the provisions of GAAP

Answer 11

The failure to follow guidelines defining professional procedures.

The failure to be accurate in categorizing assets, incomes, and expenditures.

Question 12

This relates to our discussions on corporate social responsibility

Answer 12

Pursuit of profit is constrained by an obligation to not do harm to others.

Producers are best viewed as social creations organized to serve social goals.

Question 13

This relates to financial market manipulation

Answer 13

Distortion of claims about a product’s demand or market price to encourage investment.

Timing the release of information so as to create a short term influence on price.

Question 14

This relates to a common unethical marketing strategy

Answer 14

The obscuring of disadvantages.

The hiding of costs.

Question 15

This relates to key issues in the ethics of accounting

Answer 15

Conflicts of interest.

Creative bookkeeping techniques.

Question 16

The marginal utility of money

Answer 16

The increased quality to life, or financial return, brought on by the last dollar spent

Question 17

Pareto improvement

Answer 17

Any free market exchange of goods which makes both parties better off

Question 18

The marginal utility of a good

Answer 18

The value to a consumer created by the last incremental unit of consumption

Question 19

Pareto optimality

Answer 19

That point where one or more exchange would make someone feel worse off

Question 20

zero- sum game

Answer 20

The exchange of goods which makes one party better off and one worse off

Question 21

The problem of agency

Answer 21

In this, one uses one’s decision making power to direct organization resources one’s personal use

Question 22

Churning

Answer 22

In this, a broker increases commissions by buying and selling client’s assets more than needed

Question 23

Planned obsolescence

Answer 23

In this marketing strategy, a product’s usage time is deliberately shortened

Question 24

Chinese firewall

Answer 24

In this, one division in a firm cannot ethically reveal “material” information to another division

Question 25

Mosaic analysis

Answer 25

In this, stock market analysts gather information about a corporation’s character and finances

Question 26

Dependence creation

Answer 26

In this, companies create a market instead of servicing an existing market

Question 27

Unsuitability

Answer 27

In this a financial product is sold even though the seller knows it will not meet the buyer’s needs

Question 28

Discriminatory pricing

Answer 28

In this, an industry lobbies for laws allowing them to sell products to some buyers at higher costs

Question 29

Underpricing

Answer 29

In this, a large company seeks to drive a smaller competitor out of business

Question 30

Price fixing

Answer 30

In this, a company conspires with a competitor to divide a market