Which of the Following Is an Example of the Conversion

question 133

Multiple Choice

Which of the following is an example of the conversion strategy?

• A)A corporation paying its shareholders a $20,000 dividend.
• B)A corporation paying its owner a $20,000 salary.
• C)A high tax rate taxpayer investing in tax exempt municipal bonds.
• D)A cash-basis business delaying billing its customers until after year end.
• E)None of the choices are correct.

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Definitions:

Marginal Benefit

Marginal benefit is the additional satisfaction or utility received by consuming one more unit of a good or service.

Marginal Cost

The cost attached to the production of one additional unit of a good or service.

Competitive Market

A competitive market is one where there are many buyers and sellers so that no single buyer or seller can influence the price or terms of products.

Efficient Outcomes

Are results in which resources are allocated in the most effective manner, often relating to maximized welfare or minimized waste.