Why Might the Following Quote Not Make Economic Sense: "The

question 382

Multiple Choice

Why might the following quote not make economic sense: "The round of golf I just finished was so much fun and worth the money that I should play another round before going back to work"?

• A) The marginal benefit of the second round of golf in the same day is likely to be less than the first round.
• B) The total benefit from both rounds of golf is likely to be smaller than just the first round.
• C) The opportunity cost of the second round from not going to work is likely to be smaller than the opportunity cost of the first round.
• D) The total cost of playing both rounds of golf is likely to be smaller than just the first round.

---

Definitions:

Par Preferred Stock

Preferred stock with a nominal value assigned in the corporate charter, which determines the issue price and face value for dividend calculations.

Par Common Stock

The nominal or face value assigned to a share of common stock, as stated in the corporate charter.

Market Value

The immediate market value at which one can buy or sell an asset or service.

Dividend

A portion of a company's earnings that is distributed to shareholders, typically in the form of cash or additional stock, as a reward for investing in the company.