...action, then this action is the right one and the one we should perform. Shaw and Barry talked about the theory of a woman on her death bed. She had $25,000 in cash under her bed and her dying wish was to give that to her nephew. Her nephew was a known drunk and would have squandered the money away. Another use for that money would be to give it to an orphanage where the money would have benefited the children for many years. If you use the act method, giving the money to the orphanage would have been the best thing to do because the most people would have benefited. But if you did this, would it be morally correct? This was not the dying woman’s wish. Rule utilitarianism maintains that the utilitarian standard should be applied not to individual actions but to moral codes as a whole. With the moral code, you would have to determine right from wrong. If you look at the sample given above about the dying woman’s wish to give her nephew the money, and you used the rule method, you would see that the moral decision to make would be to give it to the nephew regardless of how he chose to use it. 2. What do economists mean by the "declining marginal utility of money"? The phrase “declining marginal utility of money” means that the successive additions to one’s income produce, on average, less happiness or welfare than did earlier additions. The more disposable money that people...
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...Description of Financial Theories ____________________________________________________________ _________________ Theory General Description___________________ 1. Efficiency Theory Proposes that the prices of stock reflect all applicable information about the value of the stock. 2. Theory of Investment Highlights the importance of making educated investment decisions. 3. Agency Cost Theory Managers of the business making decisions on behalf of the stockholders. 4. Agency Cost of Free Cash Flow Theory Reinvesting excess capital. 5. Pecking-order Theory of Capital Structure Proposes that the bulk of a company’s funds should be the profit it has earned and that profit should be reinvested back in the business. 6. Economic Value Added Theory Represents the economic profit of a company. 7. Theory of Competitive Advantage When considered globally, this refers to one country’s ability to create more value for a product when they can be produced with fewer resources than another country. 8. Modern Portfolio Theory Attempts to increase investment return and decrease risk to the investor. 9. Time Value of Money Theory Suggests that money a company has today is worth more than money the company will have in the future. 10. Prospect Theory Suggests that people value gains more favorably than losses. Table 2 Current Examples of Financial Theories ____________________________________________________________ ...
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...in him engaging in extortion and shakedown. Even though his partners were at fault too; their behavior is explanatory. Why they chose to get involved is something we can understand once we put sociology into context. Informal socialization a theory...
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...Act utilitarianism is a theory which states an act is morally right if it benefits the greatest number of people; this theory is based on the act itself and accounts for the happiness (benefit) of the majority (even if others are disadvantaged). Rule utilitarianism bases morality on a rule which already exists, the action is right based on a rule (Shaw & Barry, 2013). An example of act utilitarianism would be a wealthy person in need of an organ. If they donate a large sum of money to cancer research, they would be moved to the top of the donor list. This act benefits the majority of people suffering from cancer since the money donated can be spent on research. This action would be considered moral since it benefits the greatest number of people afflicted with cancer. This act however, would be immoral for the individuals waiting for an organ donation. The same example using rule utilitarianism would be patients placed on the organ donation list in date order; when an organ becomes available it is given to the next patient on the list. The rule dictates the morality of the action. 2. What do economists mean by the “declining marginal utility of money”? The value of money decreases as an individual gains more of it. Once an individual has the basic necessities, the more money they acquire, the less it means to the individual and their happiness. This principle is meaningful to the very wealthy, whereas for poor or mid income people, money would have more importance...
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...reasons for acting or behaving in a particular way. (Oxford Dictionaries, 2013) The role of money as a motivator at work has been widely argued over a number of years. Some people say that money is the prime factor that gets employees motivated at work; some people say there are other more important factors that influence employees. It is necessary to look at various theories in order to answer the question about the role of money as a motivator in the workplace. “Where there is little pleasure in the work itself…many people may appear to be motivated primarily, if not exclusively, by money” (Mullins, 2007). Victor Vroom’s expectancy theory of motivation (1964) develops an idea that the amount of effort and level of performance directly depends on the value of the reward at the end and the overall probability of achieving it and thus, motivates employees (Mullins, 2007). The motivational force is presented as follows: ------------------------------------------------- MOTIVATIONAL FORCE = (EXPECTANCY ×INSTRUMENTALITY) × VALENCE ------------------------------------------------- Source: Hitt, Miller, Colella (2006) A combination of factors such as the sense of manageable, attractive outcomes/rewards (valence) and the overall probability of getting the reward (expectancy), leads to motivation with the help of hard work and effort. Hitt, Miller and Colella (2006) claim that the given theory has got some implications for managers who try to increase motivation in the workplace,...
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...All of economics is meant to be about people’s behavior. Behavioral Economics is a field of economics that studies how the actual decision-making process influences the decisions that are reached. The standard economic theory is known as neoclassical economics. Neoclassical economics stops short of trying to explain where people’s preferences come from, but it does not take account of the direct influence of other people’s behavior and social standards on our behavior. The theory imagines we independently know what we want and that our preferences are permanent. This standard theory is very good at explaining short-term decision-making (I want green vegetables and choose beans as they are on special offer) but cannot explain longer-term changes in preferences (I now only choose organic food). Along the same lines the importance of institutions – both formal institutions such as regulations, and informal ones, for example, how people organise markets – and the evolution of the whole economic system are not subjects of neoclassical analysis. This has significant implications Behavioral economics has evolved to be a separate branch of economic analysis which applies scientific research on human and social, cognitive and emotional factors to better understand economic decisions by consumers, borrowers, investors, and how they affect market prices, returns and the allocation of resources. Behavioral economics is that branch of one, which deals with the study and application...
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...Economics is the branch of knowledge concerned with the production, consumption and transfer of wealth. It is about making choices. We make all kinds of choices every day. How much should we spend on gas? What is the best route to work? Which roommate should take care of washing the dishes? Etc. Economics is not just about money; it is about weighing different choices or alternatives. For example: - our decisions about whether it should be us or our roommate who should be the one to clean up or do the dishes, whether we should spend an hour a week volunteering for a worthy charity or send them a little money via our cell phone, or whether we should take a job so we can help support our siblings or parents or save for our future are all economic decisions. In many cases, money is merely a helpful tool or just a veil, standing in for a partial way to evaluate some of the goals we really care about and how we make choices about those goals. Managerial Economics can be defined as amalgamation of economic theory with business practices so as to ease decision-making and future planning by management. Managerial Economics assists the managers of a firm in a rational solution of obstacles faced in the firm’s activities. It makes use of economic theory and concepts. It helps in formulating logical managerial decisions. The key of Managerial Economics is the micro-economic theory of the firm. Managerial Economics is a science dealing with effective use of scarce resources. It guides the managers...
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...companies in the world that produces a variety of drugs and supplements. The pharmaceutical industry is commonly in a negative light because it deals with making expensive products that are involved in preventing death or prolonging a life. Many of these companies get scrutinized because ethical decisions are involved relating to the testing of getting a drug approved. The U.S. Food and Drug Administration (FDA) require that a drug be tested on healthy humans to make sure it is safe for use. This creates a problem though because a reasonable individual will not take an unapproved drug unless they are substantially compensated. To combat this issue, pharmaceutical companies started testing unapproved drugs on homeless people in exchange for money and other benefits. Eli Lilly started to use this approach in the 1980s and discovered that homeless male alcoholics desperate for money would take unapproved drugs for payments of up to $4,500 a month, a warm bed, food, and good medical care. To make sure that these individuals are not exploited, the FDA requires that individuals participating in these tests give their “informed consent” and make a “truly voluntary and uncoerced decision.” (P. No. 73). This creates an ethical issue because people question whether being broke, homeless, and an alcoholic can have an effect on making an uncoerced decision. On the other hand, people would argue that these homeless men were given the chance to become addiction free, they would receive other...
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...satisfaction which consumers derive from commodities and services by purchasing different units of money.From Wikipedia, the free encyclopedia “Ineconomics, utility is a measure of satisfaction;it refers to the total satisfaction received by a consumer from consuming a good or service. “Given this measure, one may speak meaningfully of increasing or decreasing utility, and thereby explain economic behavior in terms of attempts to increase one's utility. Utility is often affected by consumption of various goods and services, possession of wealth and spending of leisure time. According to Utilitarian’s, such as Jeremy Bentham (1748–1832) and John Stuart Mill (1806–1873), theory “Society should aim to maximize the total utility of individuals, aiming for "the greatest happiness for the greatest number of people". Another theory forwarded by John Rawls (1921–2002) would have society maximize the utility of those with the lowest utility, raising them up to create a more equitable distribution across society. Utility is usually applied by economists in such constructs as the indifference curve, which plot the combination of commodities that an individual or a society would accept to maintain at given level of satisfaction. Individual utility and social utility can be construed as the value of a utility function and a social welfare function respectively. When coupled with production or commodity constraints, under some assumptions, these functions can be used to analyze Pareto efficiency...
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...college students can pay for college has sparked much debate on the ethics of human rights and morality. The question is whether or not selling body parts for money is moral. I will be discussing how Utilitarianism, Kant’s Theory, and Negative Natural Rights theory determine morality and whether each theory deems the proposal as a moral act or not. The first theory we can use in deciding if selling kidneys for tuition is ethical is Utilitarianism. Utilitarianism determines morality by saying an act is moral if it creates the greatest overall utility. This means it will require that we sacrifice our own pleasure and happiness for the greater good. The first step in determining the moral worth of the act is defining the utility. In this situation, financially poor student are selling their kidney to pay the tuition costs to go to school. The groups that are being affected are college students who cannot afford tuition and people who are in desperate need of a kidney. In the UK, “three people die every day in the UK while awaiting kidneys”. There is a clearly a high demand of kidneys. Since utilitarianism looks to produce the greatest overall utility, we need to measure the consequences to determine whether the positive consequences outweigh the negative consequences. The positive consequences are that poor students receive money for their kidneys so they can pay for college, and people who are in need of a kidney receive them and do not die. The negative consequences are that the student...
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...conflicts, which ethical and moral decisions need to be made. In this paper I will discuss the similarities and differences between virtue theory, utilitarianism, and deontological ethics. I will describe the differences on how each theory addresses ethics and morality. I will also add a personal experience to explain the relationship between virtue, values, and moral concepts as it relates to one of the three theories. Virtue theory is basically is a form of ethics that uses a person's character as a way to determine ethical behavior. Virtue theory will base their ethical decision making on a case by case bases, which will factor in personal benefit, group benefit or overall intentions. For example a person finds $100.00 outside of a bank ATM and is faced with the decision to either walk into the bank and turn in the money for the owner to claim or keep the money for themselves. This person can make the decision to keep the money based on the fact that he is short on cash that week, it can help feed his family, and the money is going to be used to help with his financial situation. In this case the found money can be a benefit or the person can choose to turn in the money, which of the two is solely up to that person to decide to do. Utilitarianism ethics is another approach that basically influence ethical behavior or decision making on the consequence that brings the best result or least amount of bad results. This method is more of what ever benefits a person or group...
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...comparing the differences and similarities between virtue theory, utilitarianism and deontological ethics it will allow us to understand what motivates individuals in their decision making course. Virtue theory focuses on the premise of what makes a good person. It emphasizes on excellence in their overall moral character, it is more about the person rather than the action. This theory believes that an individual can learn good behavior and in turn control their emotion which aids a person in making sound moral choices. Contrary to the virtue theory, utilitarianism focuses on the action an individual performs for the betterment of a group and not for ones own happiness; the question asked here is “What should I do to provide the greatest good for the greatest number of people (Boylan, 2009). Actions alone are morally neutral it is dependent on the consequences, simply saying utilitarianism is based on results. Deontological ethics focuses on rules, obligation and duties. A similarity between deontological and utilitarianism is that both deal with moral ethics and outcomes based on an individual’s actions regardless of the result. All three theories primary objective to so seek what is right / wrong, what is good /bad. Each theory allows an individual to rationalize the best moral decision for their particular situation. Religion played a pivotal role in my upbringing so I can relate to deontological theory. I was raised to live by the bible and respect the laws/rules...
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...the Theory of Constraints. The Theory of Constraints is defined as a body of knowledge which helps in understanding the way a system functions and identifying those elements which constrain the system from achieving its goals (<http://tocjonah.blogspot.com.au/>, January 2006). Though the book is about an organization involved in the manufacturing process, TOC applies to any business, and any industry (<http://www.toc-lean.com/Goal_Overview.htm>, Hutchen). These “constraints” can be internal such as a process, technology, people, or external such as the market(<http://en.wikipedia.org/wiki/Theory_of_constraints>) The story is about a company called UniCo, a manufacturing company, with Alex Rogo as a plant manager. Things are not going very smoothly at UniCo. They have not been making money for months and are weeks behind schedule on certain orders. Bill Peach, Alex’s superior arrives at the plant one day and breaks the following news to Alex: he had three months to turn things around or the plant would shut down. Things have not been going so well at home either. Spending long hours at the plant and constantly thinking about issues, has caused a rift in his home life. His wife eventually moves out, leaving Alex to take care of his two kids. One day, he ran intoa former teacher named Jonah. The meeting introduced him to another way of thinking about the problems that UniCo is facing (Lui, 1997) According to Jonah, tho goal of the business is to make money, not...
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...conflicts, which ethical and moral decisions need to be made. In this paper I will discuss the similarities and differences between virtue theory, utilitarianism, and deontological ethics. I will describe the differences on how each theory addresses ethics and morality. I will also add a personal experience to explain the relationship between virtue, values, and moral concepts as it relates to one of the three theories. Virtue theory is basically is a form of ethics that uses a person's character as a way to determine ethical behavior. Virtue theory will base their ethical decision making on a case by case bases, which will factor in personal benefit, group benefit or overall intentions. For example a person finds $100.00 outside of a bank ATM and is faced with the decision to either walk into the bank and turn in the money for the owner to claim or keep the money for themselves. This person can make the decision to keep the money based on the fact that he is short on cash that week, it can help feed his family, and the money is going to be used to help with his financial situation. In this case the found money can be a benefit or the person can choose to turn in the money, which of the two is solely up to that person to decide to do. Utilitarianism ethics is another approach that basically influence ethical behavior or decision making on the consequence that brings the best result or least amount of bad results. This method is more of what ever benefits a person or group...
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...Ethical Theories Chart |Ethical Theory | | | | | | | | | | |Utilitarianism |Deontological |Virtue ethics | | | |Definition | |Deontological is someone who will |Virtue ethics is the concentrating on | | |Utilitarianism is a moral decision|concentrate on making sure they do what is|honesty within the indivudelas character | | |that does require taking advantage|right. While making sure it with their own|inspireation and objects that xcan take | | |of the benefits and minimizing the|ethics opinions and ideas. Such honesty |place on their crucial factors of their | | |damage to society. |and loyalty. |morals. | | | ...
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