Scott and Tom Have Dinner Together

question 9

Multiple Choice

Scott and Tom have dinner together.When both decide they are full,Scott forces himself to finish the rest of the food on his plate even though he doesn't really want to,while Tom scrapes what's left on his plate into the garbage.How might an economist explain this behavior?

• A)Scott acted rationally,because the food otherwise would have been thrown away.
• B)Tom acted rationally,maximizing his utility.
• C)Both Tom and Scott acted rationally.
• D)Both Tom and Scott acted irrationally.

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Definitions:

Consolidated

The act of combining financial statements from different entities within a corporate group into one single set of statements.

Common Stock

A type of security that represents ownership in a corporation, giving holders voting rights and a share in the company's profits via dividends.

Additional Paid-In Capital

The amount of capital from shareholders that is more than the par value of the shares issued.

Retained Earnings

The portion of a company's profits that is kept or retained for reinvestment in the business, rather than distributed to shareholders as dividends.