Multiple choice

Consider the following statements: 1. Advocates of capitalism argue that business enterprises, even large ones, are voluntary associations of autonomous individuals who think they can do better for themselves if they work together cooperatively. 2. According to the concession theory of the corporation, the corporation's unique legal status is a governmental creation.

Which of the statements given above is/are correct?

  1. 1 only

  2. 2 only

  3. Both 1 and 2

  4. Neither 1 nor 2
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Capitalism views the firm as a voluntary contract between individuals seeking mutual benefit. Concession theory posits that the corporation is a legal entity that exists only by the grace or concession of the state.

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