Ethics and Law in Business and Society (4 questions) - Essay Example

A common example (argument) that arises when discussing market failure is the issue of the minimum wage law (Verleun et al. 15). The law sets wages higher than the going market-clearing wage in an effort to elevate market wages. Analysts argue that this greater wage cost will make employers recruit fewer minimum-wage workers compared to before the law was enacted (Verleun et al. 15). Therefore, more minimum wage employees are left jobless, establishing a social cost and leading to market failure.

The advantage of government regulation on the minimum wage is that is enable people to be paid fairly for the work they have done (Verleun et al. 16). However, the disadvantage of this is that a firm cannot control how much they pay their workers. A sewer system could be regarded as a public good. It also falls under the theory of market failure because, in some regions, they system does not function appropriately as it is needed, and; therefore, it affect the people who depend on it. Question 2 One main policy foundation of the Sarbanes-Oxley Act was personal liability (Verleun et al. 23). . 23). The act importantly reinforced the rule that shareholders own the United States corporations and that business managers ought to be working for shareholders to distribute business resources to their best use (Verleun et al. 23). After the law was enacted, financial experts cited enhanced investor confidence, more accuracy and more reliable financial statements as some of the benefits that the U.S. was enjoying.

The CFO and CEO are now needed clearly to take charge for their financial statements below Section 302, which was not so before the SOX (Verleun et al. 23). Critics noted that this law is financially feasible because it has improved the confidence of investors (Verleun et al. 24). Many investors are now willing to venture into the United States because of the easiness of investing in the country. Also, the government does not have to worry about financially backing the investors because shareholders can enjoy full ownership of the corporations.

This policy is fully conservative as it puts everybody on the same platform when it comes to investment (Verleun et al. 23). Even though, critics argue that it reduces the number of workers in the U.S., everybody still has a chance of reaching the highest level with this law. Question 3 According to Hobbes, peoples’ lives in the state of nature were "lonely, poor, spiteful, violent and short", a state through which egotism and the nonexistence of rights and contracts prohibited the 'social', or society.

Locke, on the other hand, considered that people in a state of nature are morally bound by The Law of Nature, simply not to harm themselves, but devoid of any government administration to safeguard them against those