Profit Maximization Is an Ambiguous Guide to Decision Making in the Private

question 7

Multiple Choice

Profit maximization is an ambiguous guide to decision making in the private sector because:

• A)firms in the private sector usually do not aim at profit maximization.
• B)the goal of profit maximization contradicts the goal of satisfying the firm's shareholders.
• C)of the presence of risk and uncertainty.
• D)profit-maximization ignores social costs and benefits.
• E)profit cannot be defined clearly.

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Definitions:

White Rat

Commonly used in psychological experiments, particularly in the study of behavior, learning, and conditioning; often associated with B.F. Skinner's work.

Conditioned Stimulus

A previously neutral stimulus that, after association with an unconditioned stimulus, elicits a conditioned response.

White Rat

Commonly used in psychologic and medical research, a laboratory rat of a breed that is white in color.

John Watson

An American psychologist who established the psychological school of behaviorism, emphasizing the importance of observable behaviors over internal phenomena like thoughts and feelings.