1. Shaw and Barry distinguish two forms of utilitarianism. What are these two forms? Briefly describe each and use examples.

There are two types of utilitarianism, act utilitarianism and rule utilitarianism. 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 (Shaw & Barry, 2013).

3. Robert Nozick presents his entitlement theory as a function of three basic principles. What are three basic principles?

Robert Nozick’s entitlement theory is based on three principals. A person can 1) gain as much wealth as they wish and 2) have the authority to distribute it at their own discretion; there is no moral obligation to share or help someone who is less fortunate under this theory providing the wealth was obtained legitimately. 3) If any wealth is acquired outside the two guiding principles then the person is not entitled to it since it was not acquired justly (Shaw & Barry, 2013). An example of this would be an individual who gains wealth by drug dealing; he would not be entitled to the money since it was obtained illegally.

4. Two main features of John Rawl’s theory of distributive justice are particularly important. What are these two features? Describe them.

Rawl’s first principle states a person has the right to certain basic liberties which is granted to them by being part of society (Shaw & Barry, 2013). An example of these rights would be the basic freedoms granted to individuals- freedom of speech, religion, etc. Rawl’s theory also states it is justifiable for certain members of society to be granted privileges which may cause inequities as long as it benefits disadvantaged members of society.

5. What is the MAXIMIN rule of making decisions?

The MAXIMIN rule of making decisions states a person who is faced with a decision will look to mitigate risk. A person would choose the option of getting the maximum benefit from the worst circumstance, rather than choose a more favorable outcome with risky odds.

6. What is the role of the “veil of ignorance” in Rawl’s theory of distributive justice?

The role of the “veil of ignorance” in Rawl’s theory of distributive justice assumes individuals would choose like governing and just principles for their society if they were all blinded to their race, status, etc. The background of individuals’ influences the decisions they make when deciding what principles are just. If all members of a society or group were neutral, they would all make the same decisions regarding rules of their society (Shaw & Barry, 2013).

7. According to Shaw and Barry, deciding what sort of economic arrangements would best promote human happiness requires the utilitarian to consider many things. What are the five considerations mentioned by Shaw and Barry?

According to Shaw and Barry a utilitarian will evaluate several considerations of an economic arrangement to determine if it will lead to human happiness. “These considerations are type of ownership (corporation, mixed ownership, small business), the way goods and services are acquired and dispersed, how the business is controlled and managed, benefits and compensation from the business and social security and welfare” (Shaw & Barry, 2013, p. 111). A utilitarian looks at the business as a whole and measures these factors when making a decision which would promote the greatest good for all involved.
References:
Shaw, W. H., & Barry, V. (2013). Moral issues in business. (12th ed.). USA: Cengage Learning