Markets Can Exist

question 103

Multiple Choice

Markets can exist:

• A) with or without property rights.
• B) only if there are property rights.
• C) only if there is perfect information.
• D) only if all goods are private.

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Definitions:

Preemptive Right

A shareholder's right to maintain their proportional ownership in a company by buying a proportionate share of any new stock issues.

Common Shareholders

Individuals or entities that own common shares in a company, giving them voting rights and a share in the company's profits.

Proxy Right

A right granted to an individual or group to vote on behalf of another person, usually a shareholder, in corporate decisions and elections.

Financial Leverage

The use of borrowed money (debt) to finance the purchase of assets, with the expectation that the income or capital gain from the assets will exceed the cost of borrowing.