Which of the Following Statements Concerning a Firm's Quest to Maximize

question 5

Multiple Choice

Which of the following statements concerning a firm's quest to maximize wealth is correct?

• A)In extremely competitive industries, we would expect firms would voluntarily engage in many socially beneficial projects to try to maximize their stocks' values.
• B)Actions that maximize a firm's stock price are inconsistent with maximizing social welfare.
• C)The concepts of social responsibility and ethical responsibility on the part of corporations are completely different and neither is relevant in maximizing stock price.
• D)In a competitive market, if a group of firms does not spend resources making social welfare improvements, but another group does, in general, this will not affect the second group's ability to attract funds.
• E)If the government did not mandate socially responsible corporate actions, such as those relating to product safety and fair hiring practices, most firms in competitive markets probably would not pursue such policies voluntarily.

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Definitions:

Privilege

A special right, advantage, or immunity granted or available only to a particular person or group of people.

Masculinity

A set of attributes, societies, and roles generally associated with boys and men, particularly involving the demonstration of strength and stoicism.

Aggressive

Characterized by or resulting from a forceful and sometimes overly assertive pursuit of one's goals and interests.

Emotionally Expressive

The ability or tendency to readily communicate emotions, including feelings of happiness, sadness, anger, or love.