Figure 10-9

question 304

Multiple Choice

Figure 10-9
-Refer to Figure 10-9, Panel (b) and Panel (c) . Which of the following is correct?

• A)A tax would move the market in Panel (b) and the market in Panel (c) closer to the socially optimal outcome.
• B)A subsidy would move the market in Panel (b) and the market in Panel (c) closer to the socially optimal outcome.
• C)A tax would move the market in Panel (b) closer to the socially optimal outcome, but a subsidy would move the market in Panel (c) closer to the socially optimal outcome.
• D)A subsidy would move the market in Panel (b) closer to the socially optimal outcome, but a tax would move the market in Panel (c) closer to the socially optimal outcome.

---

Definitions:

Liquidation

The process of closing a business and distributing its assets to claimants.

Capital Contribution

The cash, property, or other assets that investors or owners provide to a business in exchange for an ownership interest or equity.

RULPA

The Revised Uniform Limited Partnership Act, designed to update and standardize the law governing limited partnerships across the states.

Limited Partner

An investor in a limited partnership, who contributes capital but does not take part in management and is only liable to the extent of their investment.