1. CHAPTER 3 DISCUSSION QUESTIONS
1) Explain what an externality is.
2) Why did Patricia Anerson sue General Motors?
3) GM calculated that it could save how much money per automobile if it allowed
people to die in fuel-fed fires rather than alter the design of vehicle to avoid such
fires?
4) The jury awarded Anderson & her children how much money in compensatory
damages?
5) The jury awarded Anderson & her children how much money in punitive
damages?
6) How does the "science of exploitation" apply to Nike?
7) What happened in the 1911 Triangle Shirtwaist Factory disaster?
8) What was passed in 1938 by President Roosevelt's administration that banned
sweatshops, child labor, & industrial homework?
9) What % of all apparel operations in NYC are sweatshops?
10) A US Department of Labor survey found that the overall level of compliance
with the minimum wage, overtime, & child labor requirements of the Fair Labor
Standards Act is what %?

2. WHY DOES OUR SOCIETY HAVE LAWS & RULES?
OBJECTIVE VS SUBJECTIVE DECISION MAKING
OBJECTIVE:
-NOT INFLUENCED BY PERSONAL FEELINGS OR PREJUDICE.
SUBJECTIVE:
-INFLUENCED BY PERSONAL FEELINGS OR PREJUDICE.

3. ETHICS
-A SYSTEM OF MORAL PRINCIPLES RELATING TO HUMAN CONDUCT.
-A BRANCH OF PHILOSOPHY.
-KNOWN AS “MORAL PHILOSOPHY.”
-SEEKS TO ADDRESS HOW A MORAL OUTCOME CAN BE ACHIEVED IN A
SPECIFIC SITUATION.
MORALITY:
-A CODE OF CONDUCT ABOUT WHAT IS RIGHT VS WHAT IS WRONG.
RATIONALIZE:
-TO INVENT PLAUSIBLE EXPLANATIONS FOR ACTIONS, DECISIONS, ETC.

4. THE GOLDEN RULE
“ONE SHOULD TREAT OTHERS AS ONE WOULD LIKE
OTHERS TO TREAT ONESELF, & ONE SHOULD NOT TREAT
OTHERS IN WAYS THAT ONE WOULD NOT LIKE TO BE
TREATED.”

5. UTILITARIANISM
“THE PROPER COURSE OF ACTION IS THE ONE THAT
MAXIMIZES THE GREATEST GOOD FOR THE GREATEST
NUMBER.”

6. WHAT ARE ETHICAL/MORAL DECISIONS THAT “CORPORATIONS” NEED
TO MAKE?

7. OFFSHORING
“THE RELOCATION BY A COMPANY OF A BUSINESS
PROCESS FROM ONE COUNTRY TO ANOTHER.”

8. LAYOFFS

9. ANIMAL TESTING

10. INDIRECTLY MARKETING ADULT PRODUCTS TO MINORS

11. CORPORATIONS LEGALLY ARE A “PERSON” BUT THEY ARE NOT
PHYSICALLY A PERSON.
THEY DO NOT HAVE THE ABILITY TO MAKE ETHICAL/MORAL DECISIONS,
BUT………………..
PEOPLE DO.

12. WHAT IS AN EXTERNALITY?
-AN EFFECT ON AN ENTITY FROM A DECISION THAT THE
ENTITY DID NOT PLAY A ROLE IN MAKING & WHOSE
INTERESTS WERE NOT TAKEN INTO ACCOUNT WHEN
MAKING THE DECISION.
WHAT ENTITIES ARE AFFECTED BY EXTERNALITIES?
1) EMPLOYEES
2) CUSTOMERS
3) ENVIRONMENT
CLIP 4: EXTERNALITIES

13. ANDERSON V. GENERAL MOTORS

14. COST-BENEFIT ANALYSIS:
-“A REPORT GENERATED TO DETERMINE HOW WELL, OR HOW POORLY, A
PLANNED ACTION WILL TURN OUT.”
1) IDENTIFIES, QUANTIFIES, & ADDS ALL THE POSITIVE FACTORS (BENEFITS).
2) IDENTIFIES, QUANTIFIES, & SUBTRACTS ALL THE NEGATIVE FACTORS (COSTS).
3) THE DIFFERENCE BETWEEN THE 2 INDICATES WHETHER THE PLANNED ACTION
IS ADVISABLE.

15. WHAT IS THE “SCIENCE OF EXPLOITATION?”
“A BUSINESS PRACTICE WHEREBY CORPORATIONS TAKE ADVANTAGE
OF CHEAP, FOREIGN LABOR IN ORDER TO MANUFACTURE PRODUCTS
CHEAP & MAXIMIZE PROFIT.”

16. CLIP 7: MONSTROUS OBLIGATIONS