Which of the Following Would Lead a Utility-Maximizing Consumer to Search

question 164

Multiple Choice

Which of the following would lead a utility-maximizing consumer to search for additional information?

• A)an increase in income
• B)an increase in the marginal cost of information
• C)improved technology (e.g., Internet search programs)
• D)a reduction in the dispersion of prices
• E)an increase in the consumer's wage rate

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Definitions:

Sustainable Growth Rate

The maximum rate at which a company can grow its sales, earnings, and dividends without increasing its financial leverage.

Debt to Equity Ratio

The ratio showing the variance in financing methods between debt and equity for a company’s assets.

Dividend Payout Ratio

The fraction of net income a firm pays to its shareholders as dividends, expressed as a percentage of the company's total earnings.

Retention Ratio

A financial metric indicating the percentage of a company's net income that is not distributed as dividends but rather retained for reinvestment in the business.