Consumers Need Information to Make Good Choices

question 86

Multiple Choice

Consumers need information to make good choices.In the context of this information,which of the following is correct?

• A)Advertising is always harmful to consumers.
• B)Information is scarce and therefore valuable.
• C)Brand names offer no informational content.
• D)Acquiring more information is always rational.
• E)Marginal analysis does not apply to the acquisition of information.

---

Definitions:

Dividend-payout Ratio

The percentage of net income paid to shareholders in the form of dividends.

Share Price

The price of a single share of a number of saleable stocks of a company, derivative, or other financial asset.

Plowback Ratio

Plowback Ratio, also known as the retention ratio, is the proportion of earnings that a company retains and reinvests in its operations, rather than distributing as dividends.

Expected ROE

The anticipated return on equity, which measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested.