The key assumption underlying the theory of the firm is that: ...

[burchfield96]

The key assumption underlying the theory of the firm is that:
 
  A) firms are assumed to maximize sales revenue.
  B) managers are assumed to maximize the number of employees in their department.
  C) firms are assumed to maximize profits.
  D) none of the above

Question 2

________ questions have to do with explanation and prediction, ________ questions have to do with what ought to be.
 
  A) Positive; negative.
  B) Negative; normative.
  C) Affirmative; positive.
  D) Positive; normative.
  E) Econometric; theoretical.

[akudia]

Answer to Question 1

C

Answer to Question 2

D