A Rational Decision Maker Takes an Action If and Only

question 9

Multiple Choice

A rational decision maker takes an action if and only if

• A) the marginal benefit of the action exceeds the marginal cost of the action.
• B) the marginal cost of the action exceeds the marginal benefit of the action.
• C) the marginal cost of the action is zero.
• D) the opportunity cost of the action is zero.

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Definitions:

Shareholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, representing ownership interest.

Cash Flow to Stockholders

The amount of cash that a company returns to its shareholders, typically in the form of dividends.

Cash Flow to Stockholders

The amount of cash a company pays out to its shareholders, typically in the form of dividends.

Net Income

A company's final income, arrived at after subtracting expenses, taxes, and costs from its complete revenue.