MSB 390 Final Question and answers
correctly solved 2025/2026
The Fragmented Self - correct answer ✔Having a public and private self that are not aligned in terms of
your actions, beliefs, and ethics.
Integrity according to Spencer W. Kimball - correct answer ✔"A state or quality of being complete,
undivided, or unbroken"
What are the proposed reasons why people behave ethically? - correct answer ✔- Intuition
- Human Nature
- Self-Interest
Counterpoints to Intuition - correct answer ✔- Having a "good feeling" is not a reliable measure of
ethical behavior
- Just "weighing the consequences" is an unreliable measure of ethical behavior even for smart business
people.
- A good reputation is an unreliable measure of ethical behavior, even for trusted professionals.
Ethics as Human Nature - correct answer ✔- We have a neurological preference against unfairness and
deception.
- Evolutionary biology describes concern for others as a survival trait.
- The mere existence of human concepts of ethics demonstrates that it comes naturally to us.
The Economic Benefits of Ethical Behavior - correct answer ✔- The Prisoner's Dilemma Game
- Not all transactions are ZERO SUM.
- Not all transactions are PERFECT KNOWLEDGE.
,- Not all transactions are done in a VACUUM.
Based on the Prisoner's Dilemma, what does unethical behavior do? - correct answer ✔- Damages
Trust
- Encourages Retaliation
- Destroys Value
Vernon Smith, where do we live? - correct answer ✔FIRST, in a world of personal exchange
SECOND, in a world of impersonal exchange
Personal Exchange - correct answer ✔trading favors and friendship and of building reputations based
on trust and trustworthiness in small groups and families
Impersonal Exchange - correct answer ✔Through markets, where communication and cooperation
gradually emerged in trade with strangers
How does unethical behavior destroy value? - correct answer ✔There are increased transaction costs
because distrusts breads the need for ladders (lawyers, securities, regulations AND warranties,
duplications, delays)
The long invoice of unethical behavior - correct answer ✔1. Asset shrinkage
2. Security costs
3. Consumer distrust
4. Employee distrust
5. Reputation loss
6. Legal costs
7. More expensive debt
, 8. Investor distrust
9. Regulatory intrusion
10.Bankruptcy externalities
How does ethical behavior restore value? - correct answer ✔- Better Information
- Fair Competition
- Protecting the rights of others
Better Information - correct answer ✔- Trust from investors
- Lower costs for audits, controls, investigations
- Better allocation of resources
- Customers will be more loyal
- Lower costs from suppliers
- Attracting and retaining better employees
Fair Competition - correct answer ✔- Lowers cost of business in economy
- Leads to better decision-making (do what's best for firm, not one individual)
- Improves competitive nature of a country's economy
- Creates a more vibrant, entrepreneurial economy
- Attracts and retains better employees
- Reduces costs of turnover
Protecting the Rights of Others - correct answer ✔- Draws upon talents of wider set of individuals
- Develops long-term respect from the community
- Maintains the environment for long-term value to all
correctly solved 2025/2026
The Fragmented Self - correct answer ✔Having a public and private self that are not aligned in terms of
your actions, beliefs, and ethics.
Integrity according to Spencer W. Kimball - correct answer ✔"A state or quality of being complete,
undivided, or unbroken"
What are the proposed reasons why people behave ethically? - correct answer ✔- Intuition
- Human Nature
- Self-Interest
Counterpoints to Intuition - correct answer ✔- Having a "good feeling" is not a reliable measure of
ethical behavior
- Just "weighing the consequences" is an unreliable measure of ethical behavior even for smart business
people.
- A good reputation is an unreliable measure of ethical behavior, even for trusted professionals.
Ethics as Human Nature - correct answer ✔- We have a neurological preference against unfairness and
deception.
- Evolutionary biology describes concern for others as a survival trait.
- The mere existence of human concepts of ethics demonstrates that it comes naturally to us.
The Economic Benefits of Ethical Behavior - correct answer ✔- The Prisoner's Dilemma Game
- Not all transactions are ZERO SUM.
- Not all transactions are PERFECT KNOWLEDGE.
,- Not all transactions are done in a VACUUM.
Based on the Prisoner's Dilemma, what does unethical behavior do? - correct answer ✔- Damages
Trust
- Encourages Retaliation
- Destroys Value
Vernon Smith, where do we live? - correct answer ✔FIRST, in a world of personal exchange
SECOND, in a world of impersonal exchange
Personal Exchange - correct answer ✔trading favors and friendship and of building reputations based
on trust and trustworthiness in small groups and families
Impersonal Exchange - correct answer ✔Through markets, where communication and cooperation
gradually emerged in trade with strangers
How does unethical behavior destroy value? - correct answer ✔There are increased transaction costs
because distrusts breads the need for ladders (lawyers, securities, regulations AND warranties,
duplications, delays)
The long invoice of unethical behavior - correct answer ✔1. Asset shrinkage
2. Security costs
3. Consumer distrust
4. Employee distrust
5. Reputation loss
6. Legal costs
7. More expensive debt
, 8. Investor distrust
9. Regulatory intrusion
10.Bankruptcy externalities
How does ethical behavior restore value? - correct answer ✔- Better Information
- Fair Competition
- Protecting the rights of others
Better Information - correct answer ✔- Trust from investors
- Lower costs for audits, controls, investigations
- Better allocation of resources
- Customers will be more loyal
- Lower costs from suppliers
- Attracting and retaining better employees
Fair Competition - correct answer ✔- Lowers cost of business in economy
- Leads to better decision-making (do what's best for firm, not one individual)
- Improves competitive nature of a country's economy
- Creates a more vibrant, entrepreneurial economy
- Attracts and retains better employees
- Reduces costs of turnover
Protecting the Rights of Others - correct answer ✔- Draws upon talents of wider set of individuals
- Develops long-term respect from the community
- Maintains the environment for long-term value to all
