Table 12-3 -Refer to Table 12-3.Assume That the Price of a Weekend

question 308

Multiple Choice

Table 12-3

-Refer to Table 12-3.Assume that the price of a weekend ski pass is $38 and that the price reflects the actual unit cost of providing a weekend of skiing.How much consumer surplus accrues to Allyn and Greg individually?

• A)$85 and $65 respectively
• B)$49 and $35 respectively
• C)$47 and $27 respectively
• D)$37 and $17 respectively

Differentiate between effective and ineffective influence tactics.

Grasp the concept of power in organizational settings and its sources.

Understand the role of organizational politics and its impact on decision making.

Identify strategies to mitigate organizational politics.

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Definitions:

M&M Proposition II

Part of the Modigliani-Miller theorem on capital structure, stating that the cost of equity increases with higher levels of debt, as a consequence of the increased risk taken by equity holders.

Cost of Equity

The compensation that investors demand for bearing the risk of owning stock, usually reflected by earnings or dividend growth expectations.

Required Rate of Return

The minimum annual percentage earned by an investment that will induce individuals or companies to put money into a particular security or project.

M&M Proposition II

Part of the Modigliani-Miller theorem stating that a company's cost of equity increases as its level of debt increases, due to the higher risk of default.