Which of the Following Statements Is False

question 35

Multiple Choice

Which of the following statements is false?

• A) The fact that a firm has an exceptional management team, has developed an efficient manufacturing process, or has just secured a patent on a new technology is ignored when we apply a valuation multiple.
• B) Valuation multiples have the advantage that they allow us to incorporate specific information about the firm's cost of capital or future growth.
• C) For firms with substantial tangible assets, the ratio of price to book value of equity per share is sometimes used.
• D) Using multiples will not help us determine if an entire industry is overvalued.

Understand the concept of consumer preferences and how they are represented in economic models.

Grasp the assumptions underlying consumer choice theory, including completeness, transitivity, and nonsatiation.

Analyze how indifference curves represent consumer preferences and how their shape reflects underlying assumptions about marginal rates of substitution.

Understand the concept of a budget constraint and how it represents the trade-offs consumers face given their income and prices of goods.

---

Definitions:

Motivate Behaviour

The process of influencing or stimulating an individual to act in a certain way or pursue particular goals.

Biological Motives

Innate drives arising from biological needs that are critical for the survival and reproduction of an organism.

Social Needs

Social needs refer to the human requirement for relationships and interaction with others, including the need for belonging, love, and affection.

Human Motives

The intrinsic and extrinsic factors that drive individuals to engage in certain behaviors.