From the perspective of the firm, ethics is closely associated with trust. Comment.

Ethics and trust are both intrinsic and intangible items. A person may be ethical for one transaction but not another. Someone may trust a person but not find them to be an ethical person and vice-versa. Trust and ethics are not a measurable characteristic and can change from person to person as opposed to fact based item. Everyone has their dark-side so to be deemed as a trust-worthy person is quite a compliment but then to put the icing on the cake with the multiplier of ethical is a slam dunk! Ethics are how one operates in both a professional and personal manner and just because someone is ethical it does not ensure they are also trustworthy. Like a trustworthy person is not necessarily ethical. Ethics are defined differently for different individuals as is trust and the level given to a person.

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Case Study: A perfect competition

In 1997, over $700 billion purchases were charged on credit cards, and this total is increasing at a rate of over 10 per cent a year. At first glance, the credit card market would seem to be a rather concentrated industry. Visa, MasterCard and American Express are the most familiar names, and over 60 per cent of all charges are made using one of these three cards. But on closer examination, the industry seems to exhibit most characteristics of perfect competition. Consider first the size and distribution of buyers and sellers. Although Visa, Mastercard and American Express are the choices of the majority of consumers, these cards do not originate from just three firms. In fact, there are over six thousand enterprises (primarily banks and credit unions) in the US that offer charge cards to over 90 million credit card holders. One person's Visa card may have been issued by his company's credit union in Los Angeles, while a next door neighbour may have acquired hers from a Miami B...

Case Study: Bhopal Gas Tragedy - Communication Failures #1

On 3 December 1984, a runaway reaction had occurred in a storage tank of methylisocyanate (MIC), which was used to manufacture a pesticide. The valves of the tank had burst, and a cloud of poisonous gas had escaped. The winds carried it to nearby shanty towns and the populous city of Bhopal, where thousands of people either died in their sleep or woke and died while fleeing. Those who survived suffered from burning eyes and lungs. Local medical facilities were not equipped for the disaster, and over the next few weeks thousands more died. Due to production problems, the plant was under a great deal of pressure to cut costs. A number of shortcuts had thus been taken with such items as crew training, staffing patterns and maintenance schedules. The original procedure called for upto two years of training for employees in critical superintendent capacities, but the plant operators had received about a month long training, using classroom materials developed in the US and printed in Eng...

Discuss isoquant curves and isoquant maps.

In economics, an isoquant (derived from quantity and the Greek word iso, meaning equal) is a contour line drawn through the set of points at which the same quantity of output is produced while changing the quantities of two or more inputs. While an indifference curve mapping helps to solve the utility-maximizing problem of consumers, the isoquant mapping deals with the cost-minimization problem of producers. Isoquants are typically drawn on capital-labor graphs, showing the technological tradeoff between capital and labor in the production function, and the decreasing marginal returns of both inputs. Adding one input while holding the other constant eventually leads to decreasing marginal output, and this is reflected in the shape of the isoquant. A family of isoquants can be represented by an isoquant map , a graph combining a number of isoquants, each representing a different quantity of output. Isoquants are also called equal product curves. Production Isoquant/Isocost Curve ...

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