Questions on Ethics and Markets

Business Ethics: Concepts and Cases, 5th edition, chapter 4

Revised March 15, 2004; color and font revisions 3-05

by Dr. Jan Garrett

1. State the seven basic characteristics of perfectly competitive markets (PCMs)? (V: 222) Restate them in your own words so that other people can understand them.

Thought question, which draws on your awareness of history and society today: When, if ever, did the PCM characterize most markets? What markets today approximate PCMs?

2. What three additional characteristics of free competitive markets does Velasquez add? (V: 222) Restate them in your own words so that others can understand them.)

3. In what sense does a PCM maximize distributive justice? (V: 228-29) Explain. (The justice case for PCMs)

4. How do PCMs achieve efficiency? (V: 229-30) From what ethical perspective that we have studied is this an argument in favor of PCMs?

5. What kind of rights do PCMs seem to respect? (V: 230-31) From what ethical perspective that we have already studied would this be an argument in favor of PCMs? Explain.

6. In what sense do PCMs not respect justice? In what sense do PCMs not maximize social utility? How do PCMs tend to conflict with the demands of care ethics? How might they negatively impact moral character? (V: 231-32)

7. How do monopoly markets differ from PCMs? (Compare V: 222 with V: 233.) How do unregulated monopolies tend to impact efficiency? Respect for negative rights? (V: 235-36)

8. How do oligopoly markets differ from PCMs? (Compare V: 222 with V:237.) Does this make any difference for efficiency or negative rights? Explain.

9. Compare price-fixing (V:240-41) with "price-setting" (V: 244). From a utilitarian perspective on markets is there any difference between the two? From a legal perspective? If there is a discrepancy, discuss why there might be.

10. What is bribery? (V:244-45; V: 448-50, esp. 449-50.) Why does Velasquez discuss bribery in ch. 4? What bad consequences (in terms of the utilitarian defense of free markets) might be argued to arise from it? In what ways does it create injustice? Violate contractual rights?

11. What strategies for dealing with oligopolies are available? Discuss their pro's and con's from applicable ethical perspectives? (V: 246-49)