Chapter 1

Chapter 1
Self-Test
1. With regard to the application of ethics in business contexts, Velasquez maintains which
of the following?
A. Ethical principles dont apply in business contexts: business and ethics dont mix.
B. Ethics is the best long-range business strategy because unethical behavior is
always punished.
C. Ethical businesses enjoy significant competitive advantages over unethical ones,
in general, over the long haul.
D. Ethical behavior is the best long-range business strategy because unethical
behavior invites unwanted government regulation.
2. Which of the following is true of mitigating and excusing conditions?
A. Mitigation completely removes moral responsibility.
B. How mitigating a factor such as uncertainty is depends on the seriousness of the
harm or wrong done.
C. Ignorance is never a valid excuse.
D. Disability is never a valid excuse.
3. Which of the following is true regarding individual and corporate responsibility
according to Velasquez?
A. Following orders may mitigate responsibility for wrongdoing by subordinates.
B. Following orders fully excuses serious wrongdoing by subordinates.
C. Both the above.
D. None of the above.
4. Which of the following is true regarding moral reasoning and its evaluation?
A. Moral reasoning does not involve factual or descriptive judgments.
B. Moral reasoning involves normative or value judgments.
C. Ordinary logical standards of validity and consistency do not apply to moral

reasoning.
D. All of the above.
5. Velasquez characterizes morality as
A. having to do with even the most insignificant seeming matters, not just with
things we think can seriously injure or seriously benefit human beings.
B. being explicitly established by decisions of authoritative institutions like
governments or church-establishments.
C. being based on impartial considerations which override other values and
standards.
6. Velasquez defines ethics as
A. the standards an individual has about what's right & wrong.
B. the standards a society has about what's right & wrong.
C. the activity of examining moral standards and asking how they apply and whether
they are reasonable.
D. both A & B.
7. According to Velasquezs distinction between systemic, corporate, and individual moral
questions, which of the following is true?
A. Questions about the morality of Capitalism are examples of systemic questions.
B. Questions about whether Firestone or Ford bears more responsibility for deaths
due to rollovers of Ford Explorers would be examples of individual questions.
C. Questions about the morality of Capitalism, since they do not fall under any of the
three headings, are illegitimate questions.
D. Questions about whether Firestone or Ford bears more responsibility for deaths
due to rollovers of Ford Explorers would be examples of systemic questions.
8. According to Velasquez, which of the following are true of Ethical Relativism?
A. It holds there are no moral standards that are absolutely true for all societies.
B. It holds that something is right in a given society if it accords with that society's
own moral standards.
C. It would mean that a societys moral standards would themselves be beyond
criticism.
9. Economic institutions in general can be defined as institutions aiming to achieve which
of the following?
A. the production or distribution of goods.
B. the production or distribution of services.
C. the enrichment of those who own them.
D. both A and B.
Self-Test Key
Question
Answer
Objective
Pages
46-7
47-50
33-5
8-10
10-12
14
19-22
12
NOTE: The questions on the module end examination will be closely based on the self-test you
have just taken. Often, the examination will even repeat the question-part of self-test questions
while varying the answers and distracters (A, B, C, D) choices. For example, question 9 above
might appear instead with this set of options
A. the greatest happiness for the greatest number
B. the production or distribution of goods or services
C. the enrichment of those who own them
D. both B and C
making the production and distribution of goods and services (B) the correct answer.
CONSEQUENT ADVICE: The self-test questions can be very useful for studying for the
module end examination, but only if used in the right way. As the example above shows it would
have been of no use it would even have been counter productive! to have studied for the
exam by memorizing that the answer to the one about the definition of economic institutions in
general was Both A and B. The following points are noteworthy in this connection:
1. If you knew the answer to the self-test item cold you werent just guessing you
probably know enough to answer the corresponding module end examination question.
2. To the extent that your were guessing even if you got the self-test answer right you
probably need further study on this item.
3. In taking the module end examination it is extremely important that you read the
examination questions and options carefully: a little word like not or and can make all the
difference between a right and a wrong answer. Pay attention to emphasized words and
phrases italics are for emphasis and often provide clues to the questions being asked
and the answers being sought. If you thought the enrichment of those who own them
(C) was the correct answer to 9, you were probably thinking specifically of business
organizations, but the question was about economic institutions in general.
CHAPTER 2
1. Which of the following is true under the Utilitarian approach to moral evaluation?
A. The course of action with the best overall cost-benefit balance is always morally
best.
B. Actions whose costs outweigh their benefits are always immoral.
C. Actions whose benefits outweigh their costs are always moral.
D. Both B and C.
2. Which of the following is a test of the morality of an act under Kant's Categorical
Imperative?
A. The utility of guiding policy or maxim of the act.
B. The social acceptability of the maxim of the act.
C. The Biblical sanction for the maxim of the act.
D. The reversibility of the maxim of the act.
3. Which of the following states the fundamental principle of distributive [and all]
justice?
A. From each according to their ability.
B. To each according to their needs.
C. Individuals similar in all respects relevant to the kind of treatment in question
should be treated similarly.
D. Both A and B.
4. With regard to rights and duties, which of the following is true?
A. Negative rights entail duties of commission or assistance.
B. Positive rights entail duties of omission or noninterference.
C. Every right entails corresponding duties.
5. With regard to different categories or aspects of justice commonly distinguished
A. Retributive justice has to with the fair imposition of punishments and penalties.
B. Retributive justice has to do with the fair repayment of individuals for losses
suffered due to acts of others.
C. Retributive justice has to do with the fair distribution of benefits and burdens in
society.
6. Which of the following is NOT among the problems for Utilitarianism noted by
Velasquez?
A. It faces difficulties concerning the measurement of intangible benefits and costs.
B. It neglects considerations of justice.
C. It neglects considerations of efficiency.
D. It neglects of consideration of rights.
7. Which of the following is true of the various theories of distributive justice discussed in
the text?
A. Pure socialist justice holds that an individuals compensation should be based
on their needs alone.
B. Capitalist justice justice holds that an individuals compensation should be
based on their effort alone.
C. Egalitarianism holds that an individuals compensation should be based on their
both their effort and their investment
8. Which of the following is NOT a moral principle constraining contractual obligation?
A. All parties must have full knowledge of the agreement.
B. No party must intentionally misrepresent any relevant facts.
C. No party must be forced to enter the agreement under duress.
D. There must be a grace period of three days during which time any party may
withdraw their agreement for any reason.
9. Which of the following is an objection to the Kantian approach that Velasquez notes?
A. There are no moral standards that are absolutely true for all societies.
B. Kantian Ethics neglects considerations of efficiency and justice.
C. The Categorical Imperative test will wrongly judge immoral (e.g., racist)
principles moral when they are applied consistently.
D. Both A and B.
10. Which of the following best characterizes the overall approach to ethical valuation in
general and in business contexts in particular that Velasquez advocates?
A. Since Kantian, Utilitarian, and virtue based theories are all incompatible, it is
essential to pick one and stick to it.
B. Since Kantian, Utilitarian, and virtue based theories are all incomplete, it is
essential to combine them guided by rough criteria and collectively agreeable
weightings of factors.
C. Virtue based ethics should be adopted because these leave room for partiality and
provide the more detailed guidance than the alternatives Kantian and Utilitarian
approaches.
D. Both A and C.
11. Which of the following is true of special duties such as those created by contracts and
personal relations?
A. They are called special due to their being universal and inalienable rights &
duties of the whole human species.
B. They are called special because they apply only to the specific individuals who
are parties to the contract or relation.
C. They are called special because they are they are absolute or categorical duties
admitting no exceptions.
D. They are called special because they are so indispensable to the conduct of
business (in the contractual case) and society (in the personal case).
Self-Test Key
Question
Answer
Objective
Pages
61-2
78-80
89
74-5
88
64-71
89-94
78
C
B
B
3
7
6
82-3
105-8
102-4
8
9
10
11
A. They seem contrary to Kantian requirements of impartiality in the application of rules.
B. They seem contrary to Utilitarian requirements of impartiality in the weighing of
consequences.
C. They are called special because they apply only to the specific individuals who are
parties to the contract or relation.
making All of the above (D) the correct answer.

not have been completely availing to have studied for the exam by memorizing that the answer to
the one about special duties was theyre `special meaning specific since additional true
answers added made All of the above the best answer. Nevertheless it will have been of some
use, since credit will be given for true answers which are not best or the whole truth. The
following points are noteworthy in this connection:
If you knew the answer to the self-test item cold you werent just guessing you
Probably, but not assuredly, the current example shows.
To the extent that your were guessing even if you got the self-test answer right you
In taking the module end examination it is extremely important that you read the examination
questions and options carefully: a little word like not or and can make all the difference between
a right and a wrong answer. Pay attention to italicized words and phrases italics are for
emphasis and often provide clues to the questions being asked and the answers being sought.
CHAPTER3
Self-Test
The following questions will help you judge your comprehension of the materials covered in
Unit 3. Please remember you are responsible for the glossary terms above. You need to check
your responses against the key included.
1.
What are the two main components of a free market system?

A. A system of private property and a market system allowing parties to exchange
goods and services.
B. The principle of utility and the egalitarian principle of distributive justice.
C. A communitarian ideology and a market system allowing parties to exchange
goods and services.
D. A individualistic ideology and a command economy.
2. According to Velasquez,
A. the U. S. economy is a pure free-market economy having no command-elements.
B. the Swedish economy is a pure command economy having no free-market

elements.
C. both A and B.
D. neither A nor B.
3. According to John Locke or his followers,
A. free markets are best because of their superior productivity and efficiency.
B. free markets are best because they best preserve negative liberty and property
rights.
C. since free markets violate positive health and welfare rights they should be
eliminated.
D. governments have an unlimited moral authority to regulate commerce and trade.
4. According to Adam Smith,
A. Government regulation of markets is necessary to ensure distributive justice.
B. Free markets regulate production & exchange of economic goods "as if by an
invisible hand.
C. Governmental intervention in markets helps moderate the ups and downs of the
business cycle.
D. People are naturally unselfish and idealistic.
5. Which of the following is a socialist criticism challenging Adam Smiths fundamental
assumptions.
A. People aren't naturally selfish, it's the capitalist system that makes them so.
B. Free markets clearly violate capitalisms own contribution-based principles of
distributive justice.
C. Free markets always give rise to governmental interference by their very nature.
6. According to the central doctrine of John Keynes and his followers,
A. People are naturally unselfish and idealistic.
B. Government regulation of markets is necessary to ensure distributive justice.

C. Free markets regulate production & exchange of economic goods "as if by an
invisible hand."
D. Governmental intervention in markets helps moderate the ups and downs of the
business cycle.
7. According to Velasquez Social Darwinism
A. is undeniably right in its assertion that Capitalism, like natural selection tends
toward the biological improvement of the human species.
B. is certainly right in its assertion that allowing the poor to die off is natural and
desirable.
C. seems more defensible in its application to firms or corporations than to
individuals.
8. By Marx's definition a proletarian is
A. anyone who works for wages.
B. only hourly employees: salaried employees are bourgeois.
C. only blue-collar employees: white-collar employees are bourgeois.
D. a small tradesperson who owns their own means of production.
9. Alienation, according to Marx,
A. cuts the connection between the worker and the product since the product of the
worker's labor belongs to another.
B. cuts the connection between the worker and the process of production since that
process is dictated and controlled by another.
C. both A and B.
D. neither A nor B.
10. What regulates production and exchange in a free market, according to Adam Smith?
A. Supply and command.
B. Command and demand.

C. Supply and demand.
D. Government functioning as "a committee for managing the affairs of the whole"
of society.
Self-Test Key
Question
Answer
Objective
Pages
128
153-4
130-1
135-6
138-9
139-41
141-2
150
146
10
136-7
A. Market forces
B. Political commands
C. Both of the above
D. None of the above
making market forces (A) the correct answer, since supply and demand are market forces.
module end examination, but only if used in the right way. As the example above shows, in the
absence of background understanding, (from reading the text, and the study materials) it might
not have been helpful to have studied for the exam by memorizing that the answer to the one
about market regulation according to Adam Smith was supply and demand. In the absence of
background understanding, from reading the text, and the study materials, just memorizing
supply and demand might even be counterproductive in misleading you into guessing None of
the above (D), which is incorrect. The following points are noteworthy in this connection:
Self-Test
1. The public policy view that advocates breaking large firms up into smaller units (each
controlling not more than 3-5% of the market) is called
A. "the Chicago school view."
B. "the do-nothing view."
C. "the anti-trust view."

D. "the regulation view."
2. The conditions defining perfect competition that are principally violated by monopoly
and oligopoly markets are,
A. nonregulation and nonintervention.
B. distribution & openness.
C. rational economic agency and equivalent goods.
D. nonsubsidization and full and perfect knowledge.
3. Competition
A. is never really absolutely perfect.
B. is the basis for the moral benefits claimed for free markets.
C. Both A and B.
4. The principle of diminishing marginal utility principally governs
A. market distribution.
B. market subsidization.
C. supply.
D. demand.
5. The three main moral benefits alleged for free markets are
A. serving contribution-based justice, maximizing economic utility, and preserving
positive welfare rights.
B. serving needs-based justice, maximizing economic utility, and preserving negative
liberty rights.
C. serving contribution-based justice, maximizing economic utility, and preserving
positive welfare rights.
D. serving egalitarian justice, maximizing economic utility, and preserving negative

liberty rights.
6. "Discretionary preference satisfaction" concerns
A. the ability of sellers to sell to whomever they choose.
B. the ability of buyers to buy the same type of goods from whomever they choose.
C. the ability of buyers to decide between purchasing different types of goods.
D. all of the above.
7. Which of the following is true?
A. Both monopoly and oligopoly conditions are rare.
B. Both monopoly and oligopoly conditions are common.
C. Monopoly conditions are rare and oligopoly conditions are common.
D. Oligopoly conditions are rare and monopoly conditions are common.
8. What anticompetitive tactic was Continental Pie using against Utah Pie by selling cut-rate
in the Salt Lake City as compared to elsewhere?
A. price-fixing
B. price discrimination
C. tying arrangements
D. price-setting
9. The opposite of a distributed market is one that is
A. highly concentrated
B. fully open.
C. fully regulated.
D. partly subsidized.
10. The identical pricing of cigarettes by the different major tobacco companies that has gone
on since the 1930s without explicit agreements or collusion among the companies
involved an example of
A. price-fixing
B. price discrimination
C. tying arrangements
D. price-setting.
Self-Test Key
Question
Answer
Objective
Pages
188-194
3,5
176/181
167-8
169
168
180(LH)
181
185
181
8
9
187
10
have just taken. Sometimes the examination will slightly modify the question-part of self-test
questions while varying the answers and distracters (A, B, C, D) unchanged. For example,
question 1 above might keeping the same distracter/answer options the same be changed to
read as follows:
1. The public policy view that holds that large firms should not be broken up into smaller
units but subjected to substantial governmental restraint and controls is called
A. "the Chicago school view."
B. "the do-nothing view."
C. "the anti-trust view."
D. "the regulation view."
This makes the regulation view (D) the correct answer.
module end examination, but only if used in the right way. As the example above shows, in the
absence of background understanding, (from reading the text, and the study materials) it would
not have been helpful to have studied for the exam by memorizing that the answer to the one
about public policy was "the anti-trust view." In the absence of background understanding, from
reading the text, and the study materials, just memorizing the anti-trust view might even be
counterproductive in misleading you into answering the anti-trust view (D) to this different
question, which is incorrect. The following points are noteworthy in this connection:
CHAPTER 5
Self-Test
1. According to the gloomy forecast of William Pollard that Velasquez quotes at the outset
of the chapter, which of the following is true?
A. We lack the means, or wherewithal, to stave off inevitable environmental disaster.
B. We have the wherewithal but lack the will to stave off environmental disaster.
C. Falling water tables provide the best evidence that we are beginning to outgrow
the capacity of Earth's ecosystem to support us.
D. Deforestation provides the best evidence that we are beginning to outgrow the
capacity of ecosystem to support us.
2. Which of the following is true of the relationship between pollution and resource
depletion?
A. Both are equally permanent.
B. Pollution can be viewed as a type of resource depletion.
C. Both of the above.
3. The "unlimited resources" view of the past
A. viewed environmental "commodities" e.g., water and air as "free goods."
B. has become untenable in the face of exploding population growth and accelerating
industrialization and urbanization of the world.
C. viewed the "carrying capacity" of the environment as "unlimited."
4. According to Blackstone's environmental rights approach
A. it is necessary to do a cost-benefit analysis to assess the tradeoffs before
undertaking environmental legislation.
B. there is a fundamental human right to a livable environment.

5. On the mainstream utilitarian view environmental problems
A. are due to failure to count external costs as part of the total cost of production.
B. are too urgent to allow any "trade offs"
6. The principal Utilitarian remedy for pollution is
A. to internalize external costs of production.
B. to externalize internal costs of production.
C. to minimize the total social cost of production.
D. to maximize the total social cost of production.
7. According to ecofeminists and ecological ethicists, which of the following are true?
A. We have an indirect duty to preserve the ecosystem for the sake of future
generations.
B. We have a direct duty to preserve the global ecosystem for its own sake.
C. Both the above.
8. The rights of future generations, according to Velasquez,
A. are unquestionable.
B. provide the best argument for protecting the environment.
C. Both the above.
9. With regard to our obligations to future generations, what John Rawls' proposes is
A. an obligation to leave the world no worse than we found it for the next succeeding
generation.
B. an obligation to insure all succeeding generations equal rights to the same
resources as us.
C. contrary to the demands of care and utility.
10. Which of the following conclusions about what to do in the face of the approaching
scarcity of energy resources does Velasquez endorse?
A. Conservation measures are currently an option, but not yet necessary.
B. Even if those who dispute the Doomsday Scenario are right and disaster is not
immanent, conservation measures are still necessary to prevent it.
C. To undertake conservation measures at this time would be premature and
unwarranted.
Self-Test Key
Question
Answer
Objective
Pages
209-10
210
226
229-31
231-4
234-5
226-9, 241
243-4
A
B
7
2
244-6
248
8
9
10
have just taken. Sometimes the examination will slightly modify the question-part of self-test
questions while varying the answers and distracters (A, B, C, D) unchanged. For example, while
keeping the question unchanged, the distracters/answers to item 10 above might be changed to
read as follows:
A. We have an obligation to leave the world no worse than we found it for the next
succeeding generation.
B. Even if those who dispute the Doomsday Scenario are right, and disaster is not immanent,
conservation measures are still necessary to prevent it.
C. The utilitarian diagnosis and proposed remedy for pollution are on the right track.
This makes All of the above (D) the correct answer.
not have been completely availing to have studied for the exam by memorizing that the answer to
the one about that the answer to the one about Velasquezs conclusions was conservation is
necessary even if Doomsday is not immanent. Nevertheless it will have been of some use, since
credit will be given for true answers which are not best or the whole truth. The following
points are noteworthy in this connection:
In taking the module end examination it is extremely important that you read the
examination questions and options carefully: a little word like not or and can make all the
difference between a right and a wrong answer. Pay attention to italicized words and
phrases: italics are for emphasis and often provide clues to the questions being asked and
the answers being sought.

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Chapter 1

C. Ordinary logical standards of validity and consistency do not apply to moral

making All of the above (D) the correct answer.

What are the two main components of a free market system?

B. the Swedish economy is a pure command economy having no free-market

B. Government regulation of markets is necessary to ensure distributive justice.

B. Command and demand.

C. "the anti-trust view."

D. serving egalitarian justice, maximizing economic utility, and preserving negative

B. there is a fundamental human right to a livable environment.

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