Exhibit 3-1 Market Demand Suppose There Are Only Three

question 39

Multiple Choice

Exhibit 3-1 Market Demand Suppose there are only three people in the economy: Jane, Harry, and Bob. The individual demand for corn for each of these consumers is given in Exhibit 3-1. The total quantity demanded of corn if the market price is $5 is ____.

• A)3
• B)25
• C)17
• D)8
• E)26

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Definitions:

Dividend Policies

The policies and guidelines a company follows in deciding how much of its earnings it will pay out to shareholders as dividends.

Bird-In-The Hand

A theory suggesting that investors prefer dividends from a stock to potential capital gains because of the immediate certainty of receiving payouts.

Dividend Reinvestment Plans

Programs that allow shareholders to automatically reinvest their cash dividends into additional shares of the issuing company.

Dividend Policy Decision

The strategy a company uses to decide the amount and timing of dividend payments to its shareholders.