International Business: Chapter 1 & 2, Ethics and International Trade Theory

Mwata Chischa: BUS262

What are some common ethical dilemmas faced by multinational corporations (MNCs)

Human rights issues, environmental pollution, corruption, and unfair labor practices.

How can environmental pollution create ethical challenges for international business?

Harming the environment harms people's health and affects future generations.

What is corruption in international business?

Corruption is using bribery or abuse of power for personal gain.

Why is corruption in international business considered unethical?

It is unethical because it's unfair and destroys trust.

Utilitarianism

Best outcome for most people.

Right Theories

Protect basic human rights.

Justice Theories

Fairness in distribution.

What is corporate social responsibility (CSR), and how does it go beyond legal compliance?

When companies act responsibly for society and the environment, they do not just follow laws.

Why is sustainability important for businesses in today's global economy?

It ensures long-term success by balancing profit, people, and planet.

What was the main goal of mercantilist policies?

To increase national wealth by exporting more and importing less.

According to Adam Smith's theory of absolute advantage, how do nations benefit from trade?

By specializing in what they produce most defiantly and trading.

How does David Ricardo's theory of comparative advantage differ from absolute advantage?

Comparative advantage is based on the lowest opportunity cost, not efficiency.

Why can two countries both gain from trade even if one has an absolute advantage in all goods?

Because of the cooperative advantage, each focuses on what they do relatively best.

What does the Heckscher-Ohlin theory say about the relationship between factor endowments and trade?

Countries export goods that use their abundant resources

How would a labor-abundant country's trade pattern differ from a capital-abundant country's trade pattern?

Labor-rich country exports textiles; capital-rich country exports machinery.