BUSINESS ETHICS

MGT-610

FINal TErM NoTES

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BEST oF lUCk STUdENTS

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 LESSON 19

FREE MARKET ECONOMY

MCQs:

1. Which economic system combines elements of both market economy and

government intervention?

a) Capitalism

b) Socialism

c) Mixed economy

d) Communism

Answer: c) Mixed economy

2. What is a mixed economy characterized by?

a. Complete government ownership of all economic resources

b. Private ownership of all economic resources

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 c. Equal distribution of resources among all citizens

d. Both private and government ownership of economic resources

Answer: d. both private and government ownership of economic resources

3. In a mixed economy, which sectors are typically controlled by the government?

a. All economic sectors

b. Only non-essential sectors

c. Sectors important to national security and stability

d. Agricultural sectors

Answer: c. Sectors important to national security and stability

4. What does a generous welfare system in a mixed economy primarily support?

a. Tax breaks for corporations

b. Health care for the wealthy

c. Unemployed individuals and healthcare

d. Subsidies for large businesses

Answer: c. Unemployed individuals and healthcare

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Market Economy:

4. In a market economy, who owns the majority of economic resources?

a. Government

b. Individuals and businesses

c. Non-profit organizations

d. International corporations

Answer: b. Individuals and businesses

5. What determines supply and demand in a market economy?

a. Government regulations

b. Central planning

c. Price mechanism

d. Social needs

Answer: c. Price mechanism

6. What is the fundamental principle behind laissez-faire economics?

a. Government intervention in all economic matters

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 b. Centralized control of resources

c. Individualism and minimal government interference

d. Equal distribution of wealth

Answer: c. Individualism and minimal government interference

China's Economic Reforms:

7. What was the initial approach to agricultural and industrial production in early

post-revolution China?

a. Complete privatization

b. Communal planning

c. Laissez-faire policies

d. International partnerships

Answer: b. Communal planning

8. When were rural families in China allowed to grow crops of their choice and sell

them at market prices?

a. 1949

b. 1979

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 c. 1984

d. 1990

Answer: b. 1979

9. Which enterprises played a role in laying the groundwork for China's shift towards

a market economy?

a. International conglomerates

b. Township and village enterprises (TVEs)

c. State-owned corporations

d. Non-profit organizations

Answer: b. Township and village enterprises

Economic Systems:

10. Which economic system emphasizes both individual incentives and social

protection?

a. Free market economy

b. Mixed economy

c. Command economy

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 d. Subsistence economy

Answer: b. Mixed economy

11. What is a key advantage of privatization in a mixed economy?

a. Reduced taxes

b. Greater government control

c. Increased efficiency and innovation

d. Lower prices for consumers

Answer: c. Increased efficiency and innovation

12. What factor determines the prices of goods and services in a market economy?

a. Government regulations

b. Central planning

c. Supply and demand

d. Foreign exchange rates

Answer: c. Supply and demand

Global Business Impact:

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13. How are ongoing market reforms affecting international business?

a. Stifling growth and innovation

b. Creating market monopolies

c. Shifting manufacturing activity

d. Increasing government intervention

Answer: c. Shifting manufacturing activity

14. What attracts international companies to newly industrialized countries in the

context of global business?

a. High taxes

b. Developed infrastructure

c. Low wages and growing markets

d. Strong government regulations

Answer: c. Low wages and growing markets

15. What role do global capital markets play in setting up factories abroad?

a. They discourage foreign investments

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 b. They limit investment options

c. They make it easier to set up factories abroad

d. They control exchange rates

Answer: c. They make it easier to set up factories abroad

Q&A:

1. What is a mixed economy?

A mixed economy is an economic system where economic resources such as land,

factories, and other assets are owned by both the private sector and the government. This

system aims to achieve a balance between private enterprise and government

intervention.

2. What are the goals of a successful mixed economy?

The goals of a successful mixed economy include ensuring efficiency and innovation

while also safeguarding society. It aims to achieve low unemployment, reduced poverty

rates, steady economic growth, and a fair distribution of wealth.

3. How are many modern mixed economies adapting to stay competitive?

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 Many modern mixed economies are undergoing modernization efforts to enhance their

competitiveness. This involves making changes to the economic structure to improve

efficiency, innovation, and overall economic performance.

Decline of Mixed Economies

4. Why are mixed economies transitioning towards market-based systems?

Mixed economies are shifting towards market-based systems due to perceived drawbacks

of government ownership. These drawbacks include reduced efficiency, limited

innovation, decreased accountability, higher costs, slower economic growth, and

increased taxes and prices.

5. What is the concept of privatization in the context of a mixed economy?

Privatization refers to the process of selling government-owned economic resources, such

as land and enterprises, to private individuals and companies. This move aims to enhance

efficiency, reduce subsidies to state-owned firms, and decrease political interference in

managerial appointments.

Market Economy

6. What defines a market economy?

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 A market economy is characterized by the majority of a nation's economic resources

being owned privately, either by individuals or businesses. The price mechanism,

determined by supply and demand, plays a significant role in resource allocation.

7. What factors determine the quantity of a good or service that producers are willing

to supply?

The quantity of a good or service that producers are willing to supply is determined by its

price in the market. Higher prices often lead to increased supply, while lower prices may

result in decreased supply.

8. How does individualism contribute to the origins of a market economy?

The origins of a market economy are linked to the concept of individualism, where

individual concerns and motivations take precedence over group concerns. This

individualistic approach encourages individuals to act in ways that lead to incentives and

rewards, benefiting both themselves and the overall economy.

9. What does the term "Laissez-Faire Economics" mean?

"Laissez-Faire Economics" translates to "allow them to do" in French. It reflects the idea

of limited government interference in economic affairs, emphasizing individual freedom

and self-regulating market forces. This approach is believed to foster democracy and a

market-oriented economy.

10. What are some key features of a market economy?

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 In a market economy, individuals have the freedom to make choices about their

purchases, companies can decide what to produce and compete in, and prices are flexible

based on supply and demand. This leads to dynamic interactions within the economy.

China's Economic Reforms

11. What is the theme of China's economic reforms?

China's economic reforms are guided by the theme of "Socialism with Chinese

characteristics." This approach involves adapting socialist principles to the country's

unique circumstances and needs while incorporating market-oriented reforms.

12. Describe China's early economic structure in terms of ownership and production.

In the early years of China's economic development, communes were responsible for

planning agricultural and industrial production. Rural families owned their homes and

land, and production was focused on specific crops.

13. When and how did China begin to transition towards a market economy?

In 1979, China initiated government reforms that allowed families to choose and grow

their preferred crops. This shift marked the beginning of a transition towards a more

market-oriented approach to agriculture and production.

14. What role did Township and Village Enterprises (TVEs) play in China's economic

transformation?

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 Township and Village Enterprises (TVEs) played a significant role in China's economic

transformation. TVEs were allowed to obtain resources from the open market and use

private distribution systems. Legalized in 1984, TVEs laid the groundwork for a more

market-driven economy.

15. What challenges does China's economy face in its ongoing development?

China's economic development faces challenges such as political and social tensions,

including conflicts between secular and Muslim communities. There are also concerns

about unemployment, slow progress in rural areas, and the hardships faced by migrant

workers.

16. Why is China's "one country, two systems" policy significant?

China's "one country, two systems" policy is crucial for maintaining order and stability.

This policy is particularly relevant in relation to Taiwan, as it ensures that the unique

governance systems of different regions are preserved.

Impact on International Business

17. How do ongoing market reforms impact international business?

Ongoing market reforms in formerly centrally planned and mixed economies have a

profound effect on international business. These reforms lead to shifts in manufacturing

activities and create opportunities for international companies to establish ties in newly

industrialized and developing countries.

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18. What advantages do global capital markets offer to international businesses?

Global capital markets make it easier for international businesses to set up factories

abroad. These markets facilitate the flow of capital and investment, enabling companies

to tap into resources and markets in various parts of the world.

19. What are the implications of international companies forging ties in newly

industrialized countries?

International companies forging ties in newly industrialized countries can benefit from

lower production costs, access to growing markets, and increased competitiveness. These

partnerships also contribute to economic development in these countries.

20. How does the growth of developing nations impact global competition?

The growth of developing nations leads to the emergence of world-class competitors

from these regions. As these countries experience economic progress, they develop

industries and companies that can compete on a global scale, altering the dynamics of

international competition.

LESSON 20

COMPETITION AND THE MARKET

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MCQs:

1. What characterizes a perfectly competitive market?

a. Limited number of buyers and sellers

b. Government-regulated prices and quantities

c. Buyers and sellers with incomplete knowledge

d. Numerous buyers and sellers with full knowledge

Answer: d. Numerous buyers and sellers with full knowledge

2. In a perfectly competitive market, which of the following is NOT a characteristic?

a. Buyers and sellers have full and perfect knowledge.

b. External parties regulate prices and quantities.

c. Goods being sold are similar to each other.

d. Buyers and sellers can freely enter or leave the market.

Answer: d. Buyers and sellers can freely enter or leave the market.

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 3. How do prices and quantities move in a perfectly competitive market?

a. Prices rise when demand falls.

b. Prices fall when supply rises.

c. Prices and quantities move towards the equilibrium point.

d. Prices remain constant regardless of supply and demand.

Answer: c. Prices and quantities move towards the equilibrium point.

Types of Competition:

4. What is the underlying idea of a free market system?

a. Monopolizing resources for maximum profits

b. Maximizing the utility of society's members through competition

c. Eliminating competition to ensure stability

d. Centralized control of all economic resources

Answer: b. Maximizing the utility of society's members through competition

5. Which of the following is NOT a characteristic of perfect competition?

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 a. Buyers and sellers have full knowledge of market transactions.

b. Producers aim to maximize profits by any means.

c. Sellers offer similar products to buyers.

d. Buyers and sellers can freely enter or exit the market.

Answer: d. Buyers and sellers can freely enter or exit the market.

6. What is the primary goal of competition in a free market?

a. Monopolizing resources for a single entity

b. Achieving perfect equality among buyers and sellers

c. Just allocation of resources and maximizing utility

d. Eliminating the need for contracts and production

Answer: c. Just allocation of resources and maximizing utility

Anticompetitive Practices:

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7. What percentage of major corporate executives believed that businesses engage in

price fixing?

a. 10%

b. 25%

c. 60%

d. 75%

Answer: c. 60%

8. What is the impact of anticompetitive practices on a market?

a. Increases competition and efficiency

b. Enhances consumer choices

c. Undermines the moral justification of the market

d. Encourages transparency and fairness

Answer: c. Undermines the moral justification of the market

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 9. Why a competitive market is considered morally justifiable?

a. It eliminates all external parties from the market.

b. It ensures perfect equality among all market participants.

c. It creates a just allocation of resources and maximizes utility.

d. It enforces government regulations on prices and quantities.

Answer: c. It creates a just allocation of resources and maximizes utility.

Q&A:

Introduction:

1. What is the focus of this chapter's consideration of business ethics?

Answer: This chapter shifts the discussion from the morality of the economic system as a

whole to the ethics of specific practices within the system.

2. Why might the prevalence of anticompetitive practices be surprising in a free

market system?

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 Answer: Anticompetitive practices contradict the foundational idea of competition

creating a just allocation of resources and maximizing societal utility.

3. What percentage of New York Stock Exchange companies were involved in

antitrust suits during a five-year period?

Answer: 10 percent of New York Stock Exchange companies were involved in antitrust

suits in the previous five years.

Characteristics of Perfect Competition:

4. Describe a perfectly competitive market in terms of the influence on prices by buyers

and sellers.

Answer: In a perfectly competitive market, no single buyer or seller has the power to

significantly impact the price of a good.

5. List three key characteristics of a perfectly competitive market.

Answer: Numerous buyers and sellers, perfect knowledge of market activity, and the

ability for buyers and sellers to freely enter or leave the market.

6. What role does the similarity of goods being sold play in a perfectly competitive

market?

Answer: Goods being sold are so similar that buyers are indifferent to the source of

purchase, contributing to price uniformity.

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Market Equilibrium:

7. Explain the concept of the equilibrium point in a perfectly competitive market.

Answer: The equilibrium point is where the quantity produced equals the quantity buyers

want to purchase, leading to stable prices.

8. How do the supply and demand curves of buyers and sellers interact in a perfectly

competitive market?

Answer: The supply and demand curves intersect at the equilibrium point, determining

the market-clearing price and quantity.

9. What principles contribute to the movement towards the equilibrium point in a

perfectly competitive market?

Answer: The principle of diminishing marginal utility on the buyer's side and the

principle of increasing marginal costs on the seller's side.

Types of Market Competition:

10. What are the three abstract models used to understand different degrees of

competition in a market?

Answer: Perfect competition, pure monopoly, and oligopoly are the three abstract

models.

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 11. How does a pure monopoly differ from perfect competition?

Answer: A pure monopoly exists when a single seller dominates the market, while

perfect competition involves numerous buyers and sellers.

12. What is an oligopoly, and how does it differ from perfect competition?

Answer: An oligopoly is a market structure with a small number of large firms. It

contrasts with perfect competition due to reduced competition and potential collusion.

LESSON 21

PERFECT COMPETITION

MCQs:

Perfect Competition:

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1. What is the main criterion for a market to be considered perfectly competitive?

a. High consumer demand

b. Full governmental regulation

c. Presence of all seven specific features

d. Dominance by a single seller

Answer: c. Presence of all seven specific features

2. What is the primary way in which perfectly competitive free markets contribute to

efficiency?

a. They force firms to invest in industries with low demand.

b. They encourage resource wastage in commodity production.

c. They motivate firms to minimize resource consumption and use efficient

technologies.

d. They create monopolistic structures.

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 Answer: c. They motivate firms to minimize resource consumption and use

efficient technologies.

3. In the context of perfectly competitive markets, what is the equilibrium point?

a. A point of maximum profits for sellers

b. The point where demand is highest

c. The only point where both buyer and seller receive the just price

d. The point of market intervention by the government

Answer: c. The only point where both buyer and seller receive the just price

4. Which moral principle does a perfectly competitive free market embody in terms of

justice?

a. Needs-based justice

b. Distributive justice

c. Capitalist justice

d. Social justice

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 Answer: c. Capitalist justice

5. What is a defining characteristic of perfectly competitive markets in terms of entry

and exit?

a. Firms cannot freely enter or leave the market.

b. Entry and exit are controlled by the government.

c. Firms are forced to enter or leave specific industries.

d. Firms are free to enter or leave the market as they choose. (Correct Answer)

6. Which principle does a perfectly competitive market adhere to when it comes to

exchanges?

a. Exchanges are involuntary and regulated.

b. Exchanges are determined by monopolies.

c. Exchanges are based on mutual consent and voluntary participation.

d. Exchanges are influenced by external factors.

Answer: c. Exchanges are based on mutual consent and voluntary participation.

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7. In perfectly competitive markets, what prevents a single seller or buyer from

dominating the market?

a. Government intervention

b. Collaboration among sellers and buyers

c. Decentralization of industrial power among numerous firms

d. Random market fluctuations

Answer: c. Decentralization of industrial power among numerous firms

8. What is the outcome of industrial power being decentralized in a perfectly

competitive market?

a. Increased government control over prices and quantities

b. Constant fluctuations in prices

c. Preservation of negative rights and freedom from coercion

d. The emergence of a single dominant seller

Answer: c. Preservation of negative rights and freedom from coercion

9. Which form of justice is NOT established by perfectly competitive free markets?

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 a. Needs-based justice

b. Capitalist justice

c. Distributive justice

d. Utilitarian justice

Answer: d. Utilitarian justice

10. What potential impact does participation in a perfectly competitive free market

have on positive rights?

a. It enhances positive rights for all participants.

b. It diminishes the positive rights of those outside the market. (Correct Answer)

c. It ensures positive rights for society as a whole.

d. It has no impact on positive rights.

Answer: b. It diminishes the positive rights of those outside the market.

11. How do free competitive markets conflict with an ethic of care?

a. They encourage interdependent relationships.

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 b. They emphasize caring for those who are closely related.

c. They take into account human relationships among individuals.

d. They operate as if individuals are independent, ignoring human relationships.

Answer: d. They operate as if individuals are independent, ignoring human

relationships.

12. What effect can competitive pressures in perfectly competitive markets have on

people's moral character?

a. They encourage compassion and empathy.

b. They discourage economic efficiency.

c. They lead people to constantly focus on economic efficiency. (Correct Answer)

d. They promote altruism.

Answer: c. They lead people to constantly focus on economic efficiency.

Q&A:

1. Are there any real-world examples that perfectly match the model of the perfectly

competitive free market?

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A: No, in actuality, there are no real examples of perfectly competitive free markets. Some

agricultural markets come close, but they do not meet all seven necessary features.

2. How does a perfectly competitive free market relate to the concept of justice in

capitalism?

A: In a perfectly competitive free market, justice aligns with capitalism's idea of distributing

benefits and burdens so that individuals receive the value of their contributions to enterprises.

The equilibrium point in such markets ensures that both buyers and sellers receive the just price

for a product.

3. What is the role of perfectly competitive free markets in terms of maximizing utility

for buyers and sellers?

A: Perfectly competitive free markets maximize utility by encouraging efficient distribution and

use of goods. Buyers and sellers are led to use resources efficiently, invest in high-demand

industries, and receive commodities that satisfy them within budget constraints.

4. What are the three main ways in which efficiency is achieved in perfectly

competitive free markets?

A: Efficiency in perfectly competitive free markets is achieved through motivating firms to

invest in high-demand industries, encouraging resource minimization and efficient technology

use, and distributing commodities to satisfy buyers given their budgets.

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 5. What freedom do buyers and sellers have in a perfectly competitive market

regarding entry and exit?

A: In a perfectly competitive market, buyers and sellers are free to enter or leave the market as

they choose. This freedom is granted as long as individuals possess the required expertise and

financial resources.

6. How are exchanges conducted in a perfectly competitive free market?

A: Exchanges in a perfectly competitive free market are fully voluntary. Participants are not

compelled to buy or sell anything beyond their informed consent.

7. What prevents a single seller or buyer from dominating a perfectly competitive

market?

A: In a perfectly competitive market, no single seller or buyer can dominate the market.

Industrial power is decentralized among numerous firms, ensuring that prices and quantities are

not controlled by a single entity.

8. What moral rights are preserved by perfectly competitive free markets?

A: Perfectly competitive free markets preserve freedom of opportunity, consent, and freedom

from coercion. No single seller or buyer can impose terms on others.

9. What caution is advised when interpreting the moral features of perfectly

competitive free markets?

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A: While perfectly competitive free markets have moral benefits, they don't establish forms of

justice based on needs, may not maximize total utility, and could impact positive rights for those

outside the market.

10. How does an ethic of care conflict with the operation of free competitive markets?

A: Ethic of care emphasizes interdependence and caring for close relationships. Free competitive

markets assume independence and may disregard human relationships, leading to a conflict

between the two.

11. How can competitive pressures in perfectly competitive markets affect people's

behavior?

A: Competitive pressures can lead people to focus intensely on economic efficiency. Producers

are pushed to reduce costs and increase profit margins to stay competitive.

12. Can the values of capitalist justice, utility, and negative rights be guaranteed by free

markets?

A: The values of capitalist justice, utility, and negative rights are only guaranteed by free

markets if all seven conditions defining perfect competition are met. If not, these values might

not be present.

LESSON 22

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 MONOPOLY COMPETITION

MCQs:

1. What is the most significant limitation of free market morality, according to the

text?

a) Lack of innovation

b) Imperfect competition

c) Government intervention

d) Lack of consumer demand

Answer: b) Imperfect competition

2. In a perfectly competitive market, how many conditions need to be present for it to

embody the values of capitalist justice?

a) Three

b) Four

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c) Five

d) Seven

Answer: d) Seven

3. What is one of the primary differences between monopoly and perfect competition?

a) Monopolies have many sellers, while perfect competition has only one seller.

b) Monopolies have lower prices, while perfect competition has higher prices.

c) Monopolies have excess profits, while perfect competition leads to losses.

d) Monopolies have barriers to entry, while perfect competition allows free entry.

Answer: d) Monopolies have barriers to entry, while perfect competition allows free entry.

4. Why were potential competitors unable to enter the market dominated by Alcoa,

even after its patents on aluminum manufacturing expired?

a) They lacked the desire to compete.

b) They lacked experience in manufacturing.

c) Startup costs were too high.

d) Alcoa's products were of superior quality.

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Answer: c) Startup costs were too high.

5. How do monopoly markets violate capitalist justice?

a) They offer goods at prices lower than their value.

b) They encourage excessive competition.

c) They restrict output to maximize profits.

d) They charge more than goods are worth.

Answer: d) They charge more than goods are worth.

6. What is a significant consequence of monopoly markets in terms of resource

allocation?

a) They encourage cost reduction and efficiency.

b) They lead to overproduction and excess supply.

c) They promote healthy competition.

d) They result in shortages and higher prices.

Answer: d) They result in shortages and higher prices.

7. What inefficiency can arise from a monopoly market's ability to set price

differentials?

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a) Reduced profits for the monopoly firm

b) Encouragement of cost reduction

c) Equal distribution of goods

d) Preventing consumers from optimizing their purchases

Answer: d) Preventing consumers from optimizing their purchases

8. What is an oligopolistic market characterized by?

a) Many small firms with free entry

b) Only one dominant firm

c) A few large firms with barriers to entry

d) A perfectly competitive structure

Answer: c) A few large firms with barriers to entry

9. What is a common cause of an oligopolistic market structure?

a) Government intervention

b) Horizontal merger of competing firms

c) Technological innovation

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d) Perfect competition

Answer: b) Horizontal merger of competing firms

10. How do oligopolies resemble monopolies in terms of pricing and output?

a) They aim to maximize consumer welfare.

b) They encourage free entry of new firms.

c) They collaborate to set prices and limit output.

d) They promote efficiency and cost reduction.

Answer: c) They collaborate to set prices and limit output.

Q&A:

1. What are the three values of capitalist justice that are produced when a market

embodies the seven conditions of perfect competition?

Answer: The three values of capitalist justice are achieved when a market embodies the seven

conditions of perfect competition. These values include fairness, efficiency, and individual

freedom.

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 2. What is the most significant limitation of free market morality mentioned in the

text?

Answer: The most important limitation of free market morality is that because free markets are

not perfectly competitive, they do not achieve the moral values associated with perfect

competition.

3. In a monopoly market, which two of the seven conditions defining perfect

competition are absent?

Answer: In a monopoly market, the two conditions that are absent are: the presence of only one

seller (monopoly seller) and the inability of other sellers to enter the market.

4. According to the text, why couldn't competitors enter the aluminum market

dominated by Alcoa, even after its patents had expired?

Answer: Competitors could not enter the aluminum market dominated by Alcoa because the

startup costs were too high, and they lacked the experience that Alcoa had gained over the years.

5. What is the consequence of monopoly markets charging prices higher than the

worth of goods, as mentioned in the text?

Answer: Monopoly markets charging prices higher than the worth of goods violate capitalist

justice and result in unjust prices that buyers must pay.

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 6. How do monopoly markets lead to a decline in system efficiency, according to the

text?

Answer: Monopoly markets lead to a decline in system efficiency because they allow resources

to be used in ways that cause shortages of desired goods and higher prices. Additionally,

monopoly markets do not encourage suppliers to minimize resource consumption and reduce

costs.

7. How does a monopoly market's ability to introduce price differentials affect

consumer choices?

Answer: In a monopoly market, the seller can introduce price differentials that prevent

consumers from putting together the most satisfying bundle of goods they can purchase. This

leads to some buyers paying higher prices for the same goods, causing inefficiency in consumer

choices.

8. What characterizes an oligopolistic market structure?

Answer: An oligopolistic market structure is characterized by a few significant sellers

dominating the market, with a small number of firms holding a substantial share of the market.

Other sellers are not free to enter the market.

9. What is a common cause of an oligopolistic market structure?

Answer: A common cause of an oligopolistic market structure is the horizontal merger or

unification of two companies that previously competed in the same industry.

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 10. How do oligopolies behave in terms of setting prices and output, similar to

monopolies?

Answer: Oligopolies, like monopolies, can collaborate among themselves to set prices and

restrict output, behaving as if they were one large monopolistic firm. This behavior can lead to

the failure to set just profits and protect economic freedoms and social utility.

11. What are the three values of capitalist justice, and under what condition are they

produced in a market?

Answer: The three values of capitalist justice are only produced if the market embodies the

seven conditions that define perfect competition. These values are not achieved if even one of the

conditions is absent.

12. In what way does the absence of perfect competition in the market affect free

market morality?

Answer: The most important limitation of free market morality is that free markets, which are

not perfectly competitive, fail to achieve the moral values associated with perfect competition.

13. What are the two key conditions that are absent in a monopoly market?

Answer: In a monopoly market, the two key conditions that are absent are:

 The presence of only one seller.

 The inability of other sellers to enter the market.

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 14. Provide an example of a company that illustrates the absence of perfect competition

due to monopoly.

Answer: Alcoa is an example of a company that demonstrated the absence of perfect

competition due to a monopoly. Even though Alcoa's patents on aluminum manufacturing

expired, it remained the sole producer of virgin aluminum due to high startup costs and lack of

competitors entering the market.

15. What advantage did monopolies like Alcoa, Western Electric, Standard Oil, and the

American Tobacco Company have in terms of setting output levels and generating

profits?

Answer: These monopolies were able to fix their output at quantities less than equilibrium,

resulting in high demand and excess profits. If entry into these markets had been open, excess

profits would have attracted new producers and led to competitive price drops, but this dynamic

does not occur in a monopoly.

16. How do monopoly markets violate capitalist justice in terms of pricing?

Answer: Monopoly markets violate capitalist justice by charging more for goods than they are

worth, leading to unjust prices for buyers.

17. Name three ways in which a monopoly market negatively impacts efficiency and

resource allocation.

Answer: A monopoly market results in the following inefficiencies in resource allocation:

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  Shortages of desired goods and higher than necessary prices.

 Lack of encouragement for suppliers to minimize resource consumption for

production.

 Introduction of price differentials that prevent consumers from optimizing their

purchases.

18. Why are consumers unable to purchase the most satisfying bundle of goods in a

monopoly market?

Answer: In a monopoly market, price differentials prevent consumers from putting together the

most satisfying bundle of goods they can purchase given their available commodities and budget.

This leads to inefficiencies in purchasing decisions.

19. How does an oligopoly market structure differ from both a monopoly and perfect

competition?

Answer: An oligopoly market lies between a monopoly and perfect competition. In an

oligopoly, there are a few significant sellers dominating the market, and other sellers are not free

to enter. This structure contrasts with perfect competition's many sellers and free entry and with

a monopoly's single seller.

20. What is the most common cause of an oligopolistic market structure, and how does

it lead to market behavior similar to that of a monopoly?

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Answer: The most common cause of an oligopolistic market structure is the horizontal merger or

unification of two companies that used to compete in the same industry. This leads to a small

number of firms with the ability to collude on prices and restrict output, resembling the behavior

of a single large monopolistic firm.

LESSON 23

OLIGOPOLISTIC COMPETITION

MCQS:

1. What unethical practice involves companies agreeing to set prices artificially high?

a) Price Discrimination

b) Exclusive Dealing Arrangements

c) Tying Arrangements

d) Price Fixing

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Answer: d) Price Fixing

2. In an oligopoly, what factor makes collusion and unethical practices easier?

a) Highly differentiated products

b) Decreasing demand

c) Increased government regulation

d) High market concentration

Answer: d) High market concentration

3. Which unethical practice involves a company selling certain goods to a buyer only

on condition that the buyer purchases other goods from the same firm?

a) Retail Price Maintenance Agreements

b) Price Discrimination

c) Tying Arrangements

d) Manipulation of Supply

Answer: c) Tying Arrangements

4. What factor contributes to unethical practices in a market with undifferentiated

products?

43
a) Increased government oversight

b) Fierce competition on product features

c) Continuous reduction in prices

d) Dominant market share

Answer: c) Continuous reduction in prices

5. What organizational factor makes collusion among low-level salespeople more

likely?

a) Highly centralized decision-making

b) Decreased focus on profits and volume

c) Trade association meetings

d) Frequent pricing decisions

Answer: d) Frequent pricing decisions

6. How do firms sometimes establish themselves as monopoly sellers through unethical

means?

a) By creating highly differentiated products

b) By offering competitive prices

44
c) By resorting to bribery

d) By participating in trade associations

Answer: c) By resorting to bribery

7. What term is used to describe the situation where companies recognize one firm as

the "price leader" and adjust their prices accordingly?

a) Price Discrimination

b) Market Competition

c) Collusion

d) Tacit Agreement

Answer: d) Tacit Agreement

8. What role do crowded and mature markets play in encouraging unethical practices?

a) They foster innovation and differentiation

b) They promote healthy competition

c) They lead to higher profits

d) They create pressures on managers to engage in price fixing

45
Answer: d) They create pressures on managers to engage in price fixing

9. Why might firms engage in unethical practices when pricing decisions are pushed

down into the hands of lower parts of the organization?

a) Centralized decision-making promotes ethics

b) Decentralized decision-making reduces competition

c) Lower-level employees lack the knowledge to set fair prices

d) Decentralized decision-making encourages price fixing

Answer: d) Decentralized decision-making encourages price fixing

10. What is a barrier to legislating against many common oligopolistic price-setting

practices?

a) Lack of government oversight

b) Difficulty in detecting price-setting arrangements

c) Lack of trade association meetings

d) High market concentration

Answer: b) Difficulty in detecting price-setting arrangements

46
 11. Which unethical practice involves companies agreeing to sell to a retailer only on

the condition that the retailer will not purchase products from other companies

and/or will not sell outside a certain geographical area?

a) Price Fixing

b) Manipulation of Supply

c) Exclusive Dealing Arrangements

d) Tying Arrangements

Answer: c) Exclusive Dealing Arrangements

12. In an oligopolistic market, what leads companies to engage in practices like price

fixing and manipulation of supply?

a) Overcapacity in the market

b) High demand for products

c) Government regulations

d) Consumer preferences

Answer: a) Overcapacity in the market

47
 13. What is a factor that makes collusion among low-level salespeople more likely in an

organization?

a) Undifferentiated Products

b) Centralized pricing decisions

c) Differentiated Products

d) Decentralized pricing decisions

Answer: b) Centralized pricing decisions

14. What is a practice where a company charges different prices to different buyers for

the same goods or services?

a) Price Fixing

b) Price Discrimination

c) Manipulation of Supply

d) Retail Price Maintenance Agreements

Answer: b) Price Discrimination

15. Which factor contributes to the likelihood of unethical pricing practices like price

fixing?

48
a) Open competition in the market

b) Strong government oversight

c) A culture that encourages ethical behavior

d) Personnel practices that reward profits and volume

Answer: d) Personnel practices that reward profits and volume

16. Why might firms recognize one firm as the "price leader" in an oligopolistic

market?

a) To create artificial scarcity

b) To encourage price competition

c) To collectively raise prices

d) To attract more customers

Answer: c) To collectively raise prices

17. What is the result of firms resorting to bribery in the market?

a) Increased market competition

b) Decline in social utility

49
c) Lower prices for consumers

d) Improved ethical practices

Answer: b) Decline in social utility

18. What serves as a barrier to market entry when firms resort to bribery?

a) Increased competition

b) Ethical behavior

c) Market regulation

d) Monopoly-like control

Answer: d) Monopoly-like control

19. What does the text identify as one of the factors to consider when determining the

ethics of a payment?

a) Market demand

b) Government regulations

c) Relevant laws

d) Market competition

50
Answer: c) Relevant laws

20. Why are certain oligopolistic price-setting practices difficult to legislate against?

a) They involve explicit agreements

b) They result in lower prices

c) They are accomplished by tacit agreement

d) They have government approval

Answer: c) They are accomplished by tacit agreement

Q&A:

1. What unethical practices can oligopolies engage in to set high prices?

Answer: Oligopolies can engage in practices such as price fixing, manipulation of supply,

exclusive dealing arrangements, tying arrangements, retail price maintenance agreements, and

price discrimination to set high prices.

2. How does the concentration level of an oligopoly affect the possibility of collusion?

Answer: The more highly concentrated the oligopoly, the easier it becomes for firms to collude

against the interests of society, economic freedom, and justice.

51
 3. Provide an example of an unethical practice mentioned in the text.

Answer: An example of an unethical practice is "Price Fixing," where companies agree to set

prices artificially high.

4. What industrial and organizational factors contribute to companies engaging in

unethical practices in oligopolistic markets?

Answer: Several factors contribute to unethical practices in oligopolistic markets, including

crowded and mature markets, job-order nature of business, undifferentiated products, the culture

of the business, personnel practices, pricing decisions, trade associations, and corporate legal

staff.

5. How can the job-order nature of business lead to collusion among low-level

salespeople?

Answer: In businesses where orders are priced individually and decisions are made frequently

and at lower levels of the organization, collusion among low-level salespeople becomes more

likely.

6. What factor might lead salespeople to believe that collusion is necessary in markets

with undifferentiated products?

Answer: In markets with undifferentiated products, where companies compete primarily on

price, salespeople might believe that collusion is necessary to prevent prices from collapsing.

52
 7. How does a culture of the business impact the likelihood of unethical practices?

Answer: If an organization's culture condones, encourages, or rationalizes practices like price

fixing, salespeople are more likely to engage in such unethical practices.

8. How can decentralized pricing decisions contribute to unethical practices?

Answer: Decentralized pricing decisions, where pricing is pushed down to lower levels of the

organization, can contribute to price fixing and other unethical practices.

9. What role do trade associations play in encouraging unethical practices?

Answer: Allowing salespeople to meet with competitors in trade association meetings can

encourage discussions about pricing and lead to price-setting arrangements with competitors.

10. What is the consequence of firms recognizing one firm as the "price leader"?

Answer: When firms recognize one firm as the "price leader," they may raise their prices in

reaction to the leader's decisions, even without explicit discussions. This leads to a decline in

social utility due to artificially raised prices.

11. What are some of the unethical practices identified in oligopolistic competition?

Answer: Some unethical practices in oligopolistic competition include price fixing,

manipulation of supply, exclusive dealing arrangements, tying arrangements, retail price

maintenance agreements, and price discrimination.

53
 12. How does the concentration level of an oligopoly affect the ease of collusion?

Answer: The higher the concentration level of an oligopoly, the easier it becomes for firms to

collude against the interests of society, economic freedom, and justice.

13. What is price fixing in the context of oligopolistic competition?

Answer: Price fixing is when companies agree to set prices artificially high, which restricts

competition and results in higher prices for consumers.

14. How can the crowded and mature nature of a market lead to unethical practices in

oligopolies?

Answer: In crowded and mature markets, where there's overcapacity due to numerous new

entrants or declining demand, middle-level managers may resort to unethical practices like price

fixing to cope with the decline in revenues and profits.

15. Why might salespeople in industries with undifferentiated products feel compelled

to engage in unethical practices?

Answer: Salespeople in industries with undifferentiated products might feel compelled to

engage in unethical practices like price fixing when they believe that collaborating to fix prices is

the only way to prevent a collapse in prices caused by intense competition.

16. How can the culture of a business influence the likelihood of unethical practices?

54
Answer: If a business culture condones, accepts, or even encourages unethical practices like

price fixing, salespeople are more likely to engage in such practices.

17. What role do trade associations play in promoting unethical practices in

oligopolistic competition?

Answer: Allowing salespeople to meet with competitors in trade association meetings may

encourage discussions about pricing and lead to the initiation of price-setting arrangements

among competing firms.

18. Why do some firms occasionally resort to bribery in oligopolistic competition?

Answer: Firms may resort to bribery as a means to create barriers for new entrants, essentially

becoming a monopoly seller and reducing market competition.

19. How does decentralized decision-making within an organization contribute to

unethical practices?

Answer: When pricing decisions are pushed down to lower levels of the organization, it

increases the likelihood of unethical practices like price fixing, as lower-level employees may

engage in collusion without higher-level oversight.

20. Why is it challenging to legislate against many common oligopolistic price-setting

practices?

55
Answer: Many oligopolistic price-setting practices are accomplished through tacit agreements

that are not explicitly discussed. Firms may collectively realize that competition is not in their

best interest without openly discussing it.

LESSON 24

OLIGOPOLIES AND PUBLIC POLICY

MCQs:

1. What determines whether a payment initiated by the payer is a bribe or a form of

extortion?

a) The local culture's acceptance

b) The nature and purpose of the payment

c) The payer's financial status

d) The payee's willingness

Answer: b) The nature and purpose of the payment

56
 2. What is a factor to consider when determining the ethics of a payment made to a

payee?

a) The payer's financial situation

b) The local customs of bribery

c) The payee's moral standards

d) Whether the payment induces the payee to violate their official sworn duty

Answer: d) Whether the payment induces the payee to violate their official sworn duty

3. According to the Do-Nothing view, what keeps corporations in check despite

declining competition within industries?

a) Global competition

b) Countervailing powers

c) Market forces

d) Technological advancements

Answer: b) Countervailing powers

4. What is one of the assumptions of the antitrust view regarding the effects of

breaking up large corporations?

57
a) Decrease in collusion

b) Higher prices

c) Decreased innovation

d) Lower profits

Answer: a) Decrease in collusion

5. What is one of the reasons the Regulation view suggests setting up regulatory

agencies for large corporations?

a) To promote market concentration

b) To increase government control

c) To ensure economies of scale

d) To protect consumer interests

Answer: d) To protect consumer interests

6. What is a key consideration in determining whether a payment is ethically

permissible in the local culture?

a) The payer's intention

b) The payee's status

58
c) Proportionate seriousness and local acceptance

d) Economic benefits

Answer: c) Proportionate seriousness and local acceptance

7. What kind of damage does pollution pose to the environment?

a) Resource depletion

b) Harmful contamination

c) Global warming

d) Overconsumption

Answer: b) Harmful contamination

8. What is a consequence of the release of greenhouse gases?

a) Resource depletion

b) Acid rain

c) Ozone depletion

d) Global warming

Answer: d) Global warming

59
 9. What type of gases are known to contribute to global warming?

a) Nitrogen oxides

b) Sulfur dioxide

c) Carbon monoxide

d) Greenhouse gases

Answer: d) Greenhouse gases

10. What is a result of ozone depletion caused by the release of CFCs?

a) Increase in crop yields

b) Enhanced ocean plankton growth

c) Greater resistance to skin cancer

d) Damage to the ozone layer and health risks

Answer: d) Damage to the ozone layer and health risks

Q&A:

1. What differentiates a payment from a bribe to a form of extortion?

60
Answer: The initiator of the payment and whether the payee demands payment through threats.

2. How can the moral responsibility of a payer be affected in cases of extortion?

Answer: The moral responsibility may be diminished if the threatened injury is significant.

3. What determines whether a payment to induce the payee's action is ethical or

not?

Answer: Whether the payment leads the payee to violate their official sworn duty or fulfill their

existing duty.

4. What role does local culture play in assessing the ethics of a payment?

Answer: If a payment aligns with a locally accepted public custom and has proportionate

reasons, it may be ethically permissible.

5. According to the Do-Nothing view, what powers keep corporations in check

despite market concentration?

Answer: "Countervailing powers" of other corporate groups, government, and unions.

6. What does the antitrust view suggest as a solution to high concentration in

industries?

Answer: Breaking up large corporations into smaller units to promote competition, innovation,

and lower prices.

61
 7. According to the Regulation view, what should be done to control large

corporations?

Answer: Setting up regulatory agencies and legislation to ensure consumer protection without

losing economies of scale.

8. What central premise of the antitrust view relates to administrative discretion

over prices?

Answer: Industry concentration is likely to lead to administrative discretion over prices.

9. Why is a high degree of concentration deemed unnecessary according to the

antitrust view?

Answer: The most efficient scale of operation is small, and concentration is driven by mergers.

10. How is product differentiation connected to concentration, according to the

antitrust view?

Answer: Concentration is aggravated by product differentiation and is correlated with higher

profits.

11. What is the main argument of the Do-Nothing view?

Answer: The power of oligopolies is smaller than it seems, and competition between industries

replaces the decline within industries.

62
 12. What does the Regulation view propose as a solution to the dilemma posed by

oligopolistic industries?

Answer: Establishing regulatory agencies and legislation to ensure responsible corporate

behavior.

13. What are the potential consequences of global warming?

Answer: Massive flooding, disease increase, loss of species, expansion of deserts, and economic

costs.

14. What is the primary challenge posed by global warming?

Answer: The need to reduce greenhouse gas emissions significantly to prevent severe

consequences.

15. What is one of the potential consequences of ozone depletion?

Answer: A significant increase in skin cancer cases due to reduced ozone protection.

16. How does pollution relate to resource depletion?

Answer: Pollution diminishes the beneficial qualities of air, water, or land, leading to a type of

resource depletion.

17. What is a significant concern related to burning fossil fuels?

63
Answer: Acid rain formation, which harms fish populations, corrodes structures, and

contaminates water.

18. Why is the release of airborne toxins a concern?

Answer: Airborne toxins, including hazardous substances, pose serious health threats and

contribute to air pollution.

19. What is the core topic of the chapter on "Ethics and the Environment"?

Answer: The intersection of ethical considerations and the state of the environment.

20. What is the common theme between the three points of view on dealing with

oligopolistic industries?

Answer: Ensuring competition and responsible corporate behavior to achieve social benefits and

just markets.

LESSON 25

WORLDWATCH FIGURES

MCQs:

64
 1. What does environmental ethics study?

a) The relationship between humans and the environment

b) The history of economic growth

c) The development of modern agriculture

d) The technological advancements in energy consumption

Answer: a) The relationship between humans and the environment

2. Which of the following terms refers to human-centeredness in traditional ethical

thinking?

a) Ethical dualism

b) Anthropomorphism

c) Anthropocentrism

d) Altruism

Answer: c) Anthropocentrism

3. In what years did the world population reach 5 billion and 6 billion, respectively?

a) 1987 and 1999

65
b) 1960 and 1974

c) 1974 and 1987

d) 1999 and 2026

Answer: a) 1987 and 1999

4. Which region has the highest per capita CO2 emissions?

a) Asia

b) Europe

c) Africa

d) North America

Answer: d) North America

5. What is the primary driving force behind many environmental concerns like

climate change?

a) Overpopulation

b) Technological advancements

c) Energy and raw material consumption

66
d) Deforestation

Answer: c) Energy and raw material consumption

6. What has been the primary factor behind the slowdown in world agricultural

growth?

a) Increasing population growth

b) Declining economic demand for food

c) Reduced crop yields

d) Political instability

Answer: b) Declining economic demand for food

7. What is the significance of the green revolution in the 1960s?

a) It introduced modern agricultural techniques

b) It reduced world agricultural production

c) It focused on environmental conservation

d) It led to overpopulation

Answer: a) It introduced modern agricultural techniques

67
 8. What has been the main factor for increasing food production in recent decades?

a) Expanding cultivated land

b) Introduction of modern agricultural techniques

c) Rising crop yields

d) Decreasing population growth

Answer: c) Rising crop yields

9. What is the primary cause of undernutrition and food insecurity?

a) Rising crop yields

b) Political instability

c) Economic inefficiency

d) Poverty

Answer: d) Poverty

10. What is the main constraint on expanding cultivated land for agriculture?

a) Economic inefficiency

b) Scarcity of fossil fuels

68
c) Water scarcity

d) Political instability

Answer: c) Water scarcity

11. How much of the planet's water is readily accessible for direct human use?

a) Less than 0.01%

b) About 50%

c) Over 70%

d) Exactly 1%

Answer: a) Less than 0.01%

12. What factor contributes to the severity of water scarcity in a country?

a) Economic growth

b) Political stability

c) Population size and growth

d) Fossil fuel consumption

Answer: c) Population size and growth

69
 13. Which region is expected to experience moderate-to-high water stress in the

future?

a) North America

b) Europe

c) Asia

d) Africa

Answer: d) Africa

14. How much of the world's population lacks access to safe drinking water?

a) 100 million

b) 500 million

c) 1 billion

d) 2.5 billion

Answer: c) 1 billion

15. What is a significant consequence of pollution?

a) Resource depletion

70
b) Economic growth

c) Political stability

d) Agricultural expansion

Answer: a) Resource depletion

16. What is the primary concern related to global warming?

a) Increase in water availability

b) Decrease in agricultural yields

c) Spread of vector borne diseases

d) Growth of forest cover

Answer: b) Decrease in agricultural yields

17. What is the main focus of environmental literature?

a) Political theories

b) Wilderness preservation

c) Technological advancements

d) Economic growth

71
Answer: b) Wilderness preservation

18. Which factor contributes to global warming greenhouse gases?

a) Absorbing heat from the sun

b) Releasing heat into space

c) Blocking solar radiation

d) Absorbing and holding heat from the sun

Answer: d) Absorbing and holding heat from the sun

19. What is the primary factor contributing to global warming greenhouse gases?

a) Overpopulation

b) Deforestation

c) Burning fossil fuels

d) Industrial pollution

Answer: c) Burning fossil fuels

20. What is the main recommendation to halt global warming according to experts?

a) Reduce emissions by 10%

72
b) Increase fossil fuel consumption

c) Stabilize atmospheric CO2 concentrations

d) Plant more trees

Answer: c) Stabilize atmospheric CO2 concentrations

Q&A:

1. What is the primary focus of environmental ethics?

Answer: Environmental ethics studies the moral relationship between human beings and the

environment, as well as the value and moral status of the environment and its nonhuman

contents.

2. What is anthropocentrism?

Answer: Anthropocentrism refers to the human-centeredness embedded in traditional western

ethical thinking, where human interests are prioritized over the environment and nonhuman

entities.

3. What connection exists between deep ecology, feminist environmental ethics, and

social ecology?

73
Answer: These ethical approaches are connected to politics, as they explore the relationships

between humans, the environment, and social structures, advocating for broader considerations

in decision-making.

4. How do traditional ethical theories, such as consequentialism and deontology,

apply to contemporary environmental concerns?

Answer: Traditional ethical theories are applied to support modern environmental concerns by

evaluating actions based on their consequences and adherence to moral rules.

5. What is the main concern of environmental literature?

Answer: Environmental literature often focuses on wilderness preservation and the intricate

connections between humans and the natural world.

6. When did the world population reach 1 billion?

Answer: The world population reached 1 billion in the year 1804.

7. In how many years did the world population increase from 2 billion to 3 billion?

Answer: It took 33 years for the world population to increase from 2 billion to 3 billion (1927 to

1960).

8. What percentage of the world's primary energy is consumed by developed

market economies?

74
Answer: Developed market economies, constituting one fifth of the world’s population,

consume almost 60 per cent of the world’s primary energy.

9. What is the driving force behind environmental concerns like climate change and

pollution?

Answer: Energy consumption and raw materials play a dual role in providing economic activity

and human well-being while also driving various environmental concerns.

10. How have emissions of carbon dioxide (CO2) from the burning of fossil fuels

changed since 1950?

Answer: Annual global emissions of CO2 from fossil fuel burning have quadrupled since 1950.

11. Which regions have the highest per capita CO2 emissions?

Answer: North America has the highest per capita CO2 emissions, followed by Europe.

12. What are some potential consequences of global warming?

Answer: Consequences of global warming include sea level rise, coastal flooding, spread of

diseases, and reductions in agricultural yields.

13. What is the primary factor contributing to the persistence of undernutrition and

food insecurity?

75
Answer: Undernutrition and food insecurity are primarily caused by factors such as poverty,

political instability, economic inefficiency, and social inequity.

14. What role did the green revolution play in boosting food production?

Answer: The green revolution introduced modern agricultural techniques that dramatically

increased food production in some developing countries.

15. What is the main constraint on expanding cultivated land for agriculture?

Answer: The scarcity of fresh water is a significant constraint on expanding cultivated land for

agriculture.

16. How much of the planet's fresh water is readily accessible for direct human use?

Answer: Less than 0.01 per cent of the planet's water is readily accessible for direct human use.

17. What is the outlook for future water availability given recent population growth

trends?

Answer: Recent declines in population growth have improved the outlook for future water

availability, but water scarcity problems are expected to persist due to the growing global

population.

18. How many people lack access to safe drinking water and adequate sanitation?

76
Answer: Over 1 billion people lack access to safe drinking water, and two and a half billion lack

adequate sanitation, resulting in significant health challenges.

19. What are the two primary sources of threats to the environment?

Answer: Threats to the environment come from pollution and resource depletion, where

contamination and the consumption of finite resources diminish beneficial qualities.

20. What is the primary challenge posed by global warming?

Answer: Global warming poses challenges such as increased flooding, disease, loss of species,

and desert expansion, requiring significant efforts to reduce greenhouse gas emissions and

change lifestyles.

LESSON 26

FORESTS AND BIODIVERSITY

MCQS:

1. How many plant and animal species have been identified on the planet?

a) Nearly 10 million

b) Nearly 2 million

77
c) Nearly 30 million

d) Nearly 5 million

Answer: b) Nearly 2 million

2. What is the primary cause of deforestation?

a) Natural disasters

b) Urbanization

c) Agriculture and land use conversion

d) Climate change

Answer: c) Agriculture and land use conversion

3. Which ecosystem covers only 7 percent of the Earth's land area but contains at

least 50 percent of terrestrial species?

a) Coastal areas

b) Grasslands

c) Wetlands

d) Tropical rainforests

Answer: d) Tropical rainforests

4. What percentage of the Earth's forests remains as relatively natural ecosystems?

a) 20%

b) 50%

78
c) 25%

d) 80%

Answer: a) 20%

5. What is the primary concern regarding ozone depletion?

a) Reduction in agricultural productivity

b) Increase in ultraviolet radiation

c) Global warming

d) Ocean acidification

Answer: b) Increase in ultraviolet radiation

6. Which gases are known as greenhouse gases?

a) Oxygen and nitrogen

b) Carbon dioxide and methane

c) Helium and neon

d) Hydrogen and oxygen

Answer: b) Carbon dioxide and methane

7. What is the primary cause of acid rain?

a) Deforestation

b) Land-based pollution

c) Combustion of fossil fuels releasing sulfur and nitrogen oxides

79
d) Deforestation

Answer: c) Combustion of fossil fuels releasing sulfur and nitrogen oxides

8. Which human activity has contributed significantly to the breakdown of the

ozone layer?

a) Industrialization

b) Deforestation

c) Fishing

d) Agricultural expansion

Answer: a) Industrialization

9. What is the primary role of the ozone layer in the stratosphere?

a) Absorbing carbon dioxide

b) Screening ultraviolet radiation

c) Producing oxygen

d) Regulating climate

Answer: b) Screening ultraviolet radiation

10. How much of the Earth's land area did forested areas, including forest

plantations and natural forests, occupy in 1995?

a) One half

b) One fourth

80
c) One third

d) Three fourths

Answer: b) One fourth

11. What is the primary effect of air pollutants on vegetation?

a) Decreasing agricultural yields

b) Increasing timber production

c) Promoting growth

d) Enhancing photosynthesis

Answer: a) Decreasing agricultural yields

12. Which environmental issue is closely related to the combustion of fossil fuels?

a) Coral bleaching

b) Acid rain

c) Soil erosion

d) Overfishing

Answer: b) Acid rain

13. How much of the Earth's temperature is naturally regulated by greenhouse

gases?

a) 10°C

b) 25°C

81
c) 33°C

d) 50°C

Answer: c) 33°C

14. What is the primary factor causing air pollution?

a) Natural processes

b) Volcanic eruptions

c) Industrialization

d) Forest fires

Answer: c) Industrialization

15. What has contributed to the decrease in the rate of deforestation?

a) Decreased demand for agricultural products

b) Increased urbanization

c) Efforts to promote reforestation

d) International climate agreements

Answer: c) Efforts to promote reforestation

16. What has contributed significantly to the atmospheric build-up of CO2?

a) Deforestation

b) Natural volcanic activity

c) Agricultural expansion

82
d) Coral reef degradation

Answer: a) Deforestation

17. What is the primary role of tropical rainforests?

a) Producing oxygen

b) Regulating climate

c) Providing habitat for aquatic species

d) Supporting terrestrial species diversity

Answer: d) Supporting terrestrial species diversity

18. How have greenhouse gas emissions changed over the last 150 years?

a) Decreased significantly

b) Remained constant

c) Increased due to deforestation

d) Increased due to human activities

Answer: d) Increased due to human activities

19. What is the primary impact of acid rain on the environment?

a) Increased plant growth

b) Ocean acidification

c) Destruction of aquatic habitats

83
d) Harm to vegetation, aquatic life, and materials

Answer: d) Harm to vegetation, aquatic life, and materials

20. What percentage of the Earth's land area did tropical rainforests cover?

a) 50%

b) 7%

c) 25%

d) 1%

Answer: b) 7%

Q&A:

1. What is the estimated range for the number of plant and animal species that are

yet to be described?

Answer: The estimated range for the number of species yet to be described is from 10 million to

30 million.

2. What has been the trend in the rate of deforestation between 1980 and 1995?

Answer: The rate of deforestation has been declining slightly during that period.

3. Why are coastal and lowland areas, wetlands, grasslands, and forests under

pressure or destroyed?

84
Answer: These ecosystems have been affected or destroyed due to various environmental

pressures.

4. How much of the Earth's land area did forested areas occupy in 1995?

Answer: Forested areas, including forest plantations and natural forests, occupied about one

fourth of the world's land area in 1995.

5. What percentage of the Earth's land area do tropical rainforests cover?

Answer: Tropical rainforests cover only 7 percent of the Earth's land area.

6. What important role do tropical rainforests play in terms of biodiversity?

Answer: Tropical rainforests are important for supporting a high quantity and diversity of life,

containing at least 50 percent of terrestrial species.

7. How has deforestation contributed to atmospheric carbon dioxide levels?

Answer: Deforestation has contributed one third of the atmospheric build-up of CO2 over the

past 150 years.

8. How much of the Earth's original forest remains in large, relatively natural

ecosystems?

Answer: Only one fifth of the Earth's original forest remains in large, relatively natural

ecosystems.

85
 9. Why international cooperation is considered essential in relation to forests and

biodiversity?

Answer: The influences of forests and biodiversity are global, so international cooperation is

necessary to integrate environmental issues into decision-making processes.

10. What are the two primary sources of threats to the environment?

Answer: The two primary sources of threats to the environment are pollution and resource

depletion.

11. How is pollution defined in the context of environmental damage?

Answer: Pollution refers to the undesirable and unintended contamination of the environment by

the manufacture or use of commodities.

12. How does contamination of air, water, or land relate to resource depletion?

Answer: Contamination of air, water, or land diminishes their beneficial qualities, which can be

seen as a form of resource depletion.

13. What are the effects of air pollutants on vegetation and construction materials?

Answer: Air pollutants can decrease agricultural yields, damage construction materials through

corrosion, discoloration, and rot, and have detrimental effects on health and life.

14. How have industrialization and human activities affected air pollution?

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Answer: Industrialization and human activities have caused air pollution to increase

significantly over time.

15. What is the role of greenhouse gases in regulating the Earth's temperature?

Answer: Greenhouse gases absorb and hold heat from the sun, preventing it from escaping into

space and maintaining the Earth's temperature.

16. How have human activities impacted greenhouse gas emissions?

Answer: Human activities, especially burning fossil fuels like oil and coal, have substantially

increased greenhouse gas emissions over the past 150 years.

17. What is the primary cause of the depletion of the ozone layer in the stratosphere?

Answer: Chlorofluorocarbons (CFCs) released into the air have contributed to the gradual

breakdown of the ozone layer in the stratosphere.

18. What are the consequences of ozone layer depletion?

Answer: Ozone layer depletion leads to harmful ultraviolet radiation reaching the Earth's

surface, affecting life and ecosystems.

19. What is the relationship between acid rain and the combustion of fossil fuels?

Answer: Acid rain is closely related to the combustion of fossil fuels, particularly coal

containing high levels of sulfur, which releases sulfur and nitrogen oxides into the atmosphere.

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 20. How does acid rain relate to international concerns?

Answer: Acid rain is an international problem because the pollutants causing it can originate in

one country and affect another due to atmospheric transport.

LESSON 27

ETHICS AND THE ENVIRONMENT

MCQS:

1. What are Airborne Toxics?

a) Gases released by automobiles

b) Natural gases in the atmosphere

c) Highly catastrophic air pollutants

d) Nerve gases used in warfare

Answer: d) Nerve gases used in warfare

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 2. Which of the following is a common consequence of chronic exposure to air

pollutants?

a) Temporary lung function impairment

b) Reversible lung damage

c) Long-lasting and often irreversible lung function deterioration

d) Short-term respiratory issues

Answer: c) Long-lasting and often irreversible lung function deterioration

3. What pollutants can contaminate water sources?

a) Only organic wastes

b) Only dissolved salts

c) Metals, radioactive materials, and suspended materials

d) Only bacteria and viruses

Answer: c) Metals, radioactive materials, and suspended materials

4. Approximately how much of the world's surface water is too polluted for fishing

or swimming?

a) 10%

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b) 20%

c) 30%

d) 40%

Answer: d) 40%

5. What is the primary source of heat as a water pollutant?

a) Thermal energy from industrial manufacturing processes

b) Sunlight

c) Radioactive waste

d) Volcanic activity

Answer: a) Thermal energy from industrial manufacturing processes

6. What is the primary cause of oil spills?

a) Offshore drilling

b) Industrial waste disposal

c) Greenhouse gas emissions

d) Solar radiation

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Answer: a) Offshore drilling

7. What is the primary concern associated with toxic substances on land?

a) Increase in wildlife population

b) Rise in vegetation growth

c) Adverse health effects on humans and the environment

d) Decrease in waste production

Answer: c) Adverse health effects on humans and the environment

8. What is the main reason for the lack of recycling success?

a) Lack of available materials

b) Toxic chemicals in recyclable waste

c) High costs of recycling operations

d) Lack of interest in recycling

Answer: c) High costs of recycling operations

9. What is the primary threat posed by nuclear wastes?

a) Soil erosion

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b) Global warming

c) Genetic damage and cancer

d) Depletion of minerals

Answer: c) Genetic damage and cancer

10. What does the depletion of species and habitats refer to?

a) Increasing populations of species

b) Disappearance of species and their environments

c) Fossil fuel consumption

d) Recycling efforts

Answer: b) Disappearance of species and their environments

11. How have humans contributed to the depletion of species and habitats?

a) By conserving natural resources

b) Through responsible waste disposal

c) By causing pollution and habitat loss

d) By promoting green technologies

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Answer: c) By causing pollution and habitat loss

12. What is a potential consequence of the depletion of fossil fuels?

a) Decreased demand for energy

b) Reduced greenhouse gas emissions

c) Economic impact on global markets

d) Increased use of renewable energy sources

Answer: c) Economic impact on global markets

13. What is the toxic chemical used in nonstick coatings like Teflon?

a) Mercury

b) Lead

c) PFOA (perfluorooctanoic acid)

d) Arsenic

Answer: c) PFOA (perfluorooctanoic acid)

14. What does the term "being green" primarily refer to?

a) The color of environmental awareness

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b) A type of vegetarian diet

c) Environmental preservation and awareness

d) A clothing fashion trend

Answer: c) Environmental preservation and awareness

15. What concept sees the Earth as a whole, with humans and nature forming a

moral community?

a) Altruism

b) Holism

c) Materialism

d) Individualism

Answer: b) Holism

16. What is one area of concern related to "greenness"?

a) Promotion of air pollution

b) Increase in industrial waste

c) Conservation of energy

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d) Overuse of fossil fuels

Answer: c) Conservation of energy

17. What is the primary goal of "greenness" in relation to animal welfare?

a) Promoting animal testing

b) Decreasing animal populations

c) Protecting animal species

d) Encouraging hunting

Answer: c) Protecting animal species

18. What is a potential adverse effect of toxic chemical exposure during pregnancy?

a) Increased birth weight

b) Delayed puberty in offspring

c) Improved thyroid function

d) Enhanced immune system

Answer: b) Delayed puberty in offspring

19. What type of waste is produced in large quantities by U.S. residents?

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a) Liquid waste

b) Radioactive waste

c) Solid waste

d) Hazardous waste

Answer: c) Solid waste

20. What is the main concern related to the depletion of minerals?

a) Decreased demand for minerals

b) Loss of biodiversity

c) Economic impact on mining industry

d) Scarcity and rising costs of minerals

Answer: d) Scarcity and rising costs of minerals

Q&A:

1. What are some examples of airborne toxic substances mentioned in the text?

Answer: Examples include phosgene, a nerve gas used in warfare, and methyl iso-cyanate.

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 2. What is the primary source of air pollution discussed in the text?

Answer: Autos and industrial processes that emit gases and particulates.

3. How does chronic exposure to air pollutants affect lung function in humans?

Answer: It often leads to long-lasting and irreversible deterioration of lung function.

4. What types of pollutants can contaminate water sources?

Answer: Water pollutants can include organic wastes, dissolved salts, metals, radioactive

materials, bacteria, viruses, and sediments.

5. What percentage of the world's surface water is considered too polluted for

fishing or swimming?

Answer: About 40% of the world's surface water is too polluted for these activities.

6. What role does heat play in water pollution?

Answer: Heat can be a water pollutant when industrial processes transfer excess thermal energy

into water, reducing its ability to hold dissolved oxygen.

7. What are some sources of water pollution mentioned in the text?

Answer: Pollution comes from agriculture, mines, oil wells, human wastes, manufacturing,

detergents, and the food industry, among other sources.

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 8. How much solid waste does the average U.S. resident produce per day?

Answer: Each U.S. resident produces about seven pounds of solid waste per day.

9. What percentage of residential waste is typically recovered through recycling?

Answer: Only about 10% of residential wastes are recovered through recycling.

10. What are some hazardous or toxic substances that can be released on land?

Answer: These substances can include acidic chemicals, inorganic metals, flammable solvents,

pesticides, herbicides, phenols, and explosives.

11. How many different chemical compounds are currently being used in the U.S.,

according to the text?

Answer: Over 58,000 different chemical compounds are currently being used in the U.S.

12. What is the main concern associated with nuclear wastes?

Answer: Nuclear wastes contain radioactive materials that can cause severe health issues,

including cancer and genetic damage.

13. How has human activity contributed to the depletion of species and habitats?

Answer: Activities such as habitat loss and pollution have led to the extinction of many plant

and animal species.

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 14. What is the estimated percentage of species on Earth that were rendered extinct

by the year 2000?

Answer: An estimated 15% to 20% of all species on Earth—between half a million to two

million species—were rendered extinct by 2000.

15. What is the main concern related to the depletion of fossil fuels?

Answer: The consumption of fossil fuels has been rising at exponential rates, leading to

concerns about future depletion.

16. How can the depletion of minerals be calculated?

Answer: It can be calculated using either an exponential growth model or a peaked growth

model.

17. What chemical used in nonstick coatings has been linked to toxic effects?

Answer: PFOA (perfluorooctanoic acid), also known as C8, has been associated with toxic

effects.

18. What are some areas of concern mentioned in relation to "being green"?

Answer: Preservation of the environment, avoidance of pollution, conservation of energy,

depletion of raw materials, animal welfare, noise pollution, and workplace smoking prohibition

are areas of concern.

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 19. What concept envisions humans and nature forming a moral community?

Answer: Holism is a conception of nature where humans and nature together form a moral

community.

20. What does materialism, in the context of "greenness," emphasize?

Answer: Materialism emphasizes that the Earth is worth preserving and preventing irreparable

damage.

LESSON 28

ETHICS AND THE ENVIRONMENT

MCQS:

1. Why have businesses historically ignored their impact on the natural

environment?

A) Lack of awareness about pollution

B) Clear economic costs and harmful effects

C) Environmental regulations

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D) Lack of technological solutions

Answer: B) Clear economic costs and harmful effects

2. What is the primary source of air pollution discussed in the text?

A) Industrial waste

B) Sewage

C) Automobile use

D) Factory emissions

Answer: C) Automobile use

3. According to the text, what contributes to the increase in pollution problems as

the population grows?

A) Reduction in urbanization

B) Higher standards of living

C) Concentration of populations in urban centers

D) Decrease in industrial activities

Answer: C) Concentration of populations in urban centers

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 4. Which term refers to the interconnected set of organisms and environments

within which we live?

A) Economic system

B) Ecological system

C) Business environment

D) Urban ecosystem

Answer: B) Ecological system

5. According to ecological ethics, why is it important to recognize the

interrelationships of ecological systems?

A) To benefit businesses economically

B) To preserve human health

C) To ensure urbanization

D) To prevent pollution and environmental harm

Answer: D) To prevent pollution and environmental harm

6. What is the focus of deep ecology?

A) Maximizing human benefit from nature

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B) Exploiting natural resources

C) Preserving the environment for its own sake

D) Reducing the global population

Answer: C) Preserving the environment for its own sake

7. What is the main idea behind the concept of environmental rights?

A) Everyone has a duty to protect the environment

B) Possessing a livable environment is a desirable state

C) Each individual has a legal right to a livable environment

D) Livable environments are a luxury for wealthy individuals

Answer: C) Each individual has a legal right to a livable environment

8. What concept argues that pollution harms society's welfare by creating market

defects?

A) Utilitarianism

B) Ecological ethics

C) Deep ecology

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D) Environmental rights

Answer: A) Utilitarianism

9. What is a key issue in the concept of private costs and social costs?

A) The need for more external regulations

B) The alignment of private and social costs

C) The economic benefits of pollution

D) The role of technological advancements

Answer: B) The alignment of private and social costs

10. According to the text, why might producers ignore external costs in production?

A) Lack of awareness about pollution

B) Government incentives

C) Desire to minimize costs

D) Focus on short-term gains

Answer: C) Desire to minimize costs

11. What is the main goal of ecological ethics?

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A) Maximizing human benefit

B) Preserving ecosystems for human use

C) Protecting animals from harm

D) Preserving the environment for its intrinsic value

Answer: D) Preserving the environment for its intrinsic value

12. What term refers to the interconnected and interdependent set of organisms and

environments within which we live?

A) Economic system

B) Ecological system

C) Business environment

D) Urban ecosystem

Answer: B) Ecological system

13. What has the rapid population growth put severe strains on?

A) Economic resources

B) Energy sources

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C) Air and water resources

D) Urban development

Answer: C) Air and water resources

14. What is the main difficulty with the absolute rights approach?

A) Lack of legal enforcement

B) Insufficient public support

C) Lack of nuanced guidance

D) Complexity of environmental laws

Answer: C) Lack of nuanced guidance

15. According to utilitarianism, why should pollution be avoided?

A) To protect human rights

B) To prevent market defects

C) To avoid legal penalties

D) To preserve cultural heritage

Answer: B) To prevent market defects

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 16. What do economists distinguish between when considering the cost of making a

product?

A) Private costs and social costs

B) Manufacturing costs and production costs

C) Internal costs and external costs

D) Variable costs and fixed costs

Answer: A) Private costs and social costs

17. What is the focus of deep ecology?

A) Maximizing human benefit from nature

B) Exploiting natural resources

C) Preserving the environment for its own sake

D) Reducing the global population

Answer: C) Preserving the environment for its own sake

18. What is the main goal of environmental rights?

A) Maximizing economic growth

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B) Balancing private and social costs

C) Recognizing the value of the environment for its own sake

D) Ensuring equal access to resources

Answer: C) Recognizing the value of the environment for its own sake

19. According to ecological ethics, why should humans recognize and preserve

ecological systems?

A) To exploit their resources more effectively

B) To prevent legal challenges

C) To prevent pollution

D) To fulfill human capacities and preserve biodiversity

Answer: D) To fulfill human capacities and preserve biodiversity

20. What does the text suggest about the costs of pollution in comparison to benefits?

A) Costs of pollution are always higher than benefits

B) Costs of pollution are negligible

C) Costs of pollution can sometimes be higher than benefits

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D) Benefits of pollution always outweigh the costs

Answer: C) Costs of pollution can sometimes be higher than benefits

Q&A:

1. Why have businesses historically ignored their impact on the natural

environment?

Answer: Businesses have largely ignored their impact on the natural environment because the

economic costs and harmful effects of this impact have been unclear.

2. What is the term used to describe the interconnected and interdependent set of

organisms and environments within which we live?

Answer: Ecological system.

3. What is the primary source of air pollution discussed in the text?

Answer: Automobile use.

4. How has the world's population growth impacted pollution problems?

Answer: The rapid population growth has put severe strains on air and water resources due to

increased pollution.

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 5. What ethical concept suggests that the environment deserves to be preserved for

its own sake?

Answer: Ecological ethics or deep ecology.

6. According to deep ecology, what value does the environment have regardless of

its usefulness to humans?

Answer: Intrinsic value.

7. What is the main idea behind the concept of environmental rights?

Answer: Each human being has a right to a livable environment, and others have a duty to allow

this right.

8. Why is Blackstone's concept of environmental rights criticized for its lack of

nuance?

Answer: It fails to provide detailed guidance for making complex environmental decisions.

9. How do utilitarians view pollution in terms of market defects?

Answer: Utilitarians see pollution as harmful to society's welfare and an outcome of market

defects.

10. What do economists distinguish between when considering the cost of making a

product?

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