"An Objective of Firms Is to Maximize Profits

question 39

Multiple Choice

"An objective of firms is to maximize profits." This statement

• A)has been proven by empirical testing to be always true.
• B)is an assumption used by economists to predict the behaviour of firms.
• C)is a normative statement and thus cannot be tested.
• D)applies only to corporations.
• E)is an unrealistic assumption,and therefore of little use to economists.

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Definitions:

Oxygen

A chemical element with symbol O and atomic number 8, essential for respiration in many living organisms and for combustion.

Fermentation

A metabolic process that converts sugar to acids, gases, or alcohol in the absence of oxygen.

Alcohol

An organic compound characterized by one or more hydroxyl (-OH) groups attached to a carbon atom, commonly used in beverages, medicine, and as a solvent.

Lactic Acid

A compound produced in the muscles during strenuous exercise, responsible for the feeling of muscle fatigue.