Economists Normally Assume That a Firm Would

question 117

Multiple Choice

Economists normally assume that a firm would?
(i) sell a higher output if this would increase revenue
(ii) sell a lower output and collect less revenue, if this would increase profit
(iii) sell a higher output and incur more costs, if this would increase profit

• A)(i) and (ii)
• B)(i) and (iii)
• C)(ii) and (iii)
• D)none of the above

---

Definitions:

Stereotypes

Fixed sets of characteristics that are attributed to all the members of a group; simplistic and rigid perceptions of members of one group that are widely shared by others.

Attribution Error

A cognitive bias that involves misattributing the causes of someone's behavior to their personality, rather than to situational factors.

Normative Expectations

The beliefs or standards considered normal within a specific culture or group, guiding behavior and influencing conformity.

Social Desirability

The tendency of respondents to answer questions in a manner that will be viewed favorably by others, often skewing survey or research results.