All of the Following Statements Regarding Rational Ignorance Are True

question 73

Multiple Choice

All of the following statements regarding rational ignorance are true except

• A)it results when the cost of information exceeds the expected benefit of acquiring the information.
• B)it allows special interest groups to exert political influence.
• C)combined with special interest groups, it yields inefficiency in the provision of public goods.
• D)it leads to an efficient outcome.
• E)none of the above.

---

Definitions:

Par Value

A nominal value assigned to share of stock by the corporation's charter, used primarily for legal purposes.

Paid-In Capital

Funds contributed by shareholders in exchange for shares of stock, representing a source of equity financing for a company.

Preferred Stock

Preferred stock is a type of stock that grants holders specific privileges over common stockholders, typically including priority in dividend payments and asset liquidation.

Stockholders' Equity

Represents the owners' residual interest in the assets of a corporation after deducting liabilities, often detailed in the equity section of the balance sheet.