The Ethical Conflict Alex Is Facing in the FDA Liability

question 56

Multiple Choice

The ethical conflict Alex is facing in the FDA Liability Concerns can be best characterized as:

• A) Alex and Michael can't convince Gregory of the extent of the problem caused by the listeria identified by the FDA.
• B) Alex wants to do the right thing by consumers of his salad oil products but Michael objects based on his cost benefit analysis.
• C) Alex and Michael want to make the plant seem as profitable as possible so the firm can do an IPO and cash out their shares but Gregory wants to inform the FDA of the extent of the listeria problem.
• D) Gregory and Michael are using cost-benefit analysis to pay fines and do the minimum for the FDA while Alex wants to comply fully.

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Definitions:

Consumer Surplus

The distinction between the price consumers intend to pay for a product or service and the price they actually pay.

Government Policy

Laws, regulations, and actions taken by a government to monitor, regulate, or influence economic, social, or environmental outcomes.

Producer Surplus

The distinction between what sellers expect to earn from a good or service and the actual compensation they receive.

Consumer Surplus

The discrepancy between the maximum price consumers are ready to spend on a good or service and their actual expenditure, reflecting the consumer's gain.