If a Firm Engages in Activities That Simultaneously Are Profit-Optimizing

question 23

Multiple Choice

If a firm engages in activities that simultaneously are profit-optimizing and socially responsible:

• A) Economists that adopt the stakeholder theory, but not the shareholder theory, will agree with its conduct
• B) Economists that adopt the shareholder theory, but not the stakeholder theory, will agree with its conduct
• C) Economists uniformly will criticize its claims of social responsibility as being highly unlikely, if not impossible
• D) Its behavior is commendable in accordance with both the shareholder and the stakeholder theories

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Definitions:

Social Security

A government program that provides financial assistance to people with an inadequate or no income, primarily the elderly, disabled, and families with dependent children.

New Deal Coalition

An alliance of diverse voter groups in the United States that supported the Democratic Party because of Franklin D. Roosevelt's New Deal policies in the 1930s and 1940s.

Vietnam War

A prolonged conflict (1955-1975) between Communist forces in North Vietnam and the government of South Vietnam, heavily involving the United States and other allies.

Civil Rights

Civil rights are the rights of citizens to political and social freedom and equality.