If a Company Strictly Complies with Existing Laws, the Firm

question 3

Multiple Choice

If a company strictly complies with existing laws, the firm will

• A)fulfill all business ethics obligations.
• B)fulfill no business ethics obligations.
• C)fulfill some business ethics obligations.
• D)not need to fulfill any business ethics obligations.

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in relative prices, holding the consumer's overall utility constant.

Income Effect

The Income Effect describes how changes in an individual's income affect their purchasing capacity and thus their demand for goods and services.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, opposite to normal goods.

Substitution Effect

The economic principle that as the price of a good rises, consumers will replace it with cheaper alternatives, whereas if its price falls, the good will be favored over more expensive substitutes.