Rational Ignorance

question 2

Multiple Choice

Rational ignorance

• A)results when the cost of acquiring information exceeds the benefit of acquiring the information.
• B)allows special interest groups to exert political influence.
• C)combined with special-interest groups can yield inefficient provision of public goods.
• D)results in all of the above.
• E)results in none of the above.

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Definitions:

Net Income

After deducting taxes and expenses from its revenues, the resultant profit of a company.

Dividends

Cash payouts from a firm to its equity holders, usually derived from the company's financial gains.

Common Stock

Shares entitling the holder to dividends that fluctuate in amount and the right to vote on the company's policy and corporate decisions.