Which One of the Following Statements Is TRUE

question 32

Multiple Choice

Which one of the following statements is TRUE?

• A) Management is said to be entrenched when senior managers are unlikely to be fired.
• B) A company's matching contribution to a retirement plan is a nonpecuniary benefit.
• C) Company sponsorship of a local charity is an example of a nonpecuniary benefit.
• D) A manager/shareholder agency conflict arises when shareholders sell their stock even though management says the stock is undervalued.
• E) A manager/shareholder agency conflict arises when the board of directors pays a larger dividend than the firm's earnings could support.

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Definitions:

Utility

An indicator of the joy or contentment a buyer experiences from the consumption of products and services.

Indifference Curve

A graph that shows a combination of two goods that give a consumer equal satisfaction and utility, illustrating their preferences.

Rational Consumer

A theoretical concept depicting a consumer who makes decisions based on maximizing utility, considering all available information and options.

Utility Levels

A measure of the varying degrees of satisfaction or utility that consumers derive from different bundles of goods and services.