EXAM 1 REVIEW
About an hour and a half long.
* On chapters 1-6
* 10 questions (short response)
* 6 or 7 sentences each (you can bullet some of them)
* Focus on main concepts of chapters
* Know what Externalization is (pg. 233-234)
* People maintain the view that corporations have responsibilities that go beyond making money because of their great social and economic power. Business is governed by an implicit social contract that requires it to operate in ways that benefit society. In particular, corporations must take responsibility for the unintended side effects of their business transactions (externalities) and weigh the full social costs of their activities. * In recent years, we have grown more aware of the possible deleterious side effects of business activity, something economists refer to as… * Externalities: the unintended negative (or positive sometimes) consequences that an economic transaction between 2 parties can have on some third party. * Cost externalizing is a socio-economical term describing how a business maximizes its profits by off loading indirect costs and forcing negative effects to a third party. * Know difference between legality and morality (pg. 19)
* Legality is basically when an act becomes legal or illegal according to whether or not it contravenes any of the laws of the land. What the laws do not prohibit is legal and what the laws do not allow is illegal. * Morality concerns the principles that do or should regulate people’s conduct and relations with others. An act is moral or immoral according to whether it contravenes a moral standard. To this extent morality is similar to legality because in each case the act must be referred to some other standard to know whether it is moral or immoral, legal or illegal. * An action can be illegal but morally right, and legal but morally wrong. Legality is based on laws, regulations, etc. Morality concerns behavior that is of serious consequence to human welfare that can profoundly injure or benefit people. * Know Difference Principle
* John Rawl’s other part of the second principle is less familiar and more controversial. Known as the Difference Principle, an inequality in the distribution of wealth or income is unjust whenever it doesn’t benefit the poorest members of society. Lets imagine that were in our original position. It requires a system of distributing wealth and income that over time is in the best interests of the worst off members of society. * We wish to make sure that under the principles we choose, the worst that can happen to us once the “veil of ignorance” is taken off us is always better than the worst that could have happened under another arrangement. With this, strict social and economic equality is more abundant amongst us. Total happiness in society is increased immensely. * If businesses paid attention to the Difference Principle, what would they do differently? (pg. 133) * The Difference Principle basically says that with an equal division of goods, there’s no risk of doing worse than anyone else. In a business standpoint, if a company divides things up equally, then people will lack an incentive to undertake some of the more difficult work that society needs done. It would be easy for a company to follow the DP; just pay everyone on their payroll evenly. A company would not quite prosper enough in this case, thus why companies do not pay attention to this principle. Paying people more for doing something more productive than what others actually know how to would be an inequality for the less-advantaged and not accepted by utilizing the Difference Principle. Would it be fair to allow these kinds of inequalities in a business environment? The answer is no.
* Plausible deniability
* A condition in which a subject can safely and believably deny knowledge of any particular truth that may exist. This may be due to the fact...
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