Which of the Following Creates an Incentive to Increase the Amount

question 109

Multiple Choice

Which of the following creates an incentive to increase the amount of an activity?

• A)an increase in the marginal cost of the activity and a decrease in the marginal benefit from the activity
• B)a decrease in the marginal cost of the activity and an increase in the marginal benefit from the activity
• C)constant marginal cost and constant marginal benefit from the activity
• D)an increase in the marginal cost of the activity and an equal increase in the marginal benefit from the activity
• E)a decrease in the marginal cost of the activity and an equal decrease in the marginal benefit from the activity

---

Definitions:

Statement of Cash Flows

A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, dividing activities into operating, investing, and financing activities.

Cash Flow

Cash flow refers to the net amount of cash and cash-equivalents being transferred into and out of a business, illustrating the company's financial health and operational efficiency.

Operations

The day-to-day activities and processes conducted by a business to generate value and serve its customers effectively.

Asset Turnover Ratio

A measure of how efficiently a company uses its assets to generate sales revenue.