8. A fundamental criticism of the traditional theory of the firm is that the decision makers in the firm may not even aim to maximise profits in the first place. On which ONE of the following is this criticism based? A. Many shareholders do not want to maximise profits. B. Owners of firms are not 'rational'. C. Shareholders are not the decision makers and have different interests from them. D. Managers prefer to maximise profits because this is usually in their own interest. E. Shareholders are really utility maximisers.

4. Write short notes explaining the meaning and significance of the following concepts in economic theory: (a) Expected utility maximisation; (b) X efficiency and technical efficiency; and (c) Perfect contestability.

Vicky quit her $ 75, 000 a year marketing executive job to open her own firm.  In Vicky's first year in business her total revenue equaled $ 180,000.  Vicky's explicit cost during the year totaled $ 80,000.  To start her business Vicky took $ 50,000 from her savings account that was paying an interest of 10% annually.  What is her economic profit for her first year in business?   A. -$26,000   B. -$ 25,000   C. $ 25,000   D. $ 24,000