Arlene makes earrings in the shape of the mascot of a local university. Last year Arlene made 250 pairs of earrings, which she sold to the university bookstore for $10 each. Arlene works out of her home, so her only cost is $3 per pair for materials and $85 for tax help. If Arlene didn't produce earrings, she would spend her time babysitting her nephews and make about $500 per year. Which of the following is TRUE?

Development economics must have a scope wider than traditional economics because

a. values and attitudes play little role in the pace of development. b. people in developing societies do less utility-maximizing. c. transformation of social institutions is necessary for development. d. all of the above.

Which of the following statements concerning the shareholder wealth maximization model is (are) true?

a. The timing of future profits is explicitly considered. b. The model provides a conceptual basis for evaluating differential levels of risk. c. The model is only valid for dividend-paying firms. d. a and b e. a, b, and c