Figure 10-13

question 124

Multiple Choice

Figure 10-13. On the graph, Q represents the quantity of plastics and P represents the price of plastics.
-Refer to Figure 10-13. If 325 units of plastics are produced and consumed, then the

• A)social optimum has been reached.
• B)market equilibrium has been reached.
• C)government must have imposed a corrective tax to guide the market to this outcome.
• D)government must have offered a corrective subsidy to guide the market to this outcome.

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Definitions:

Fair Market Value

An estimate of the market value of a property, based on what a knowledgeable, willing, and unpressured buyer would likely pay to a knowledgeable, willing, and unpressured seller in the market.

Business Judgment Rule

A legal principle protecting corporate directors and officers from liability for decisions made in good faith and in the best interest of the company.

Derivative Action

A lawsuit brought by a corporation’s shareholder on behalf of the corporation against a third party, often an insider of the corporation.

Uncertificated

Referring to securities or stocks that are not represented by a physical certificate, existing only as electronic records.