Rational Ignorance

question 162

Multiple Choice

Rational ignorance

• A)explains why consumers ignore sunk costs when they vote.
• B)explains the Arrow impossibility theorem.
• C)refers to attempts by special interests to use government action to make themselves better off at the expense of others.
• D)helps to explain why rent seeking by special interest groups occurs.

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Definitions:

Financial Leverage

Applying borrowed resources to escalate the potential profits of an investment.

EPS

Earnings Per Share, a measure of a company's profitability that divides its net profit by the number of outstanding shares.

ROE

Return on Equity; a measure of financial performance calculated by dividing net income by shareholders' equity, indicating how efficiently a company uses its assets to generate profit.

ROCE

Return on Capital Employed, a financial ratio that measures a company's profitability and the efficiency with which its capital is used.