According to the Text, What Question Ought to Be Asked

question 15

Multiple Choice

According to the text, what question ought to be asked when acting upon high ethical standards in business?

• A) If everyone else is cheating, then how can an ethical person possibly succeed?
• B) How do you measure success?
• C) What would others in my situation do?
• D) What would my family think?
• E) Will I regret this decision?

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Definitions:

Economic Profits

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs, indicating the extra income earned over what could have been earned in the next best alternative.

Accounting Profits

The sales revenues minus the expenses of a firm over a designated time period, usually one year. Accounting profits typically make allowances for changes in the firm’s inventories and depreciation of its assets. No allowance is made, however, for the opportunity cost of the equity capital of the firm’s owners, or other implicit costs.

Zero

Zero is a numerical value representing the absence of any quantity or magnitude; it plays a central role in mathematics and economics.

Corporate Form

A legal structure for a business, recognized by law as separate from its owners, with its own rights, privileges, and liabilities.