If Economists Are Making the Assumption That Business People Try

question 214

Multiple Choice

If economists are making the assumption that business people try to maximize profits, the best way to determine whether this assumption is useful or not is to

• A) see whether it generates accurate predictions about the choices of business people.
• B) ask business people whether it is true or not.
• C) find out whether U.S. businesses are more profitable than European businesses.
• D) take a survey of people and see if they agree with this assumption.

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Definitions:

Risks And Rewards

The potential positive or negative outcomes of business activities or investments, considering the chance of gain or loss.

Loss Of Control

Refers to a situation where an entity or individual no longer has the ability to govern or manage the operations or decisions of a company or asset.

Financial Statements

Financial statements are written records that convey the business activities and the financial performance of a company, including the balance sheet, income statement, and cash flow statement.

Fair Value

A measure of the price at which an asset or liability could be exchanged in a current transaction between willing parties.