It Is Assumed in Standard Economic Theory That a Firm

question 116

Multiple Choice

It is assumed in standard economic theory that a firm makes decisions in an effort to

• A) become as large as possible.
• B) have a highly diversified product.
• C) maximize its profits.
• D) maximize its revenue.
• E) be favoured politically.

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Definitions:

Context

The circumstances or setting surrounding an event, statement, or idea which gives it additional meaning.

Audience

A group of spectators or listeners, especially those gathered to watch, listen to, or read something.

Leptin

A hormone that, when released into the bloodstream, signals the hypothalamus that the body has had enough food and reduces the appetite while increasing the feeling of being full.

Incentive Approaches

Theories of motivation in which behavior is explained as a response to the external stimulus and its rewarding properties.