Which of the Following Types of Goods Is Subject to the Free-Rider

question 162

Multiple Choice

Which of the following types of goods is subject to the free-rider problem?

• A) A private good
• B) A public good
• C) A product that creates a positive externality
• D) A product that creates a negative externality

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Definitions:

Debt Management Ratios

Those ratios—debt to total assets, debt to stockholders’ equity, and times interest earned—which measure a company’s mix of debt and equity financing.

Equity Financing

The process of raising capital through the sale of shares in a company, leading to share ownership by investors.

Vertical Analysis

A financial analysis method that represents each item in a financial statement as a percentage of a base figure, enabling comparison and assessment of financial health over different periods.

Trend Analysis

A type of horizontal analysis that deals with percentage changes in items on the financial reports for several years. This analysis uses a base year to calculate the percentage change of each item.