Scenario 10-1 The Demand Curve for Gasoline Slopes Downward and the Supply

question 130

Multiple Choice

Scenario 10-1
The demand curve for gasoline slopes downward and the supply curve for gasoline slopes upward. The production of the 400th gallon of gasoline entails the following:
a private cost of $2.83;
a social cost of $3.12;
a value to consumers of $3.23.
-Education yields positive externalities. For example,

• A)colleges and universities have benefited, in recent years, from increases in tuition paid by students.
• B)as a result of earning a college degree, a person becomes a more productive worker and benefits by earning higher wages.
• C)a more educated population tends to result in lower crime rates.
• D)when students go to school, they reinforce the demand for teachers.

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Definitions:

Current Assets

Short-term assets that are expected to be converted into cash, sold, or consumed within one year or a business cycle, whichever is longer.

Working Capital

The difference between a company's current assets and current liabilities, indicating the liquidity available to run its operations.

Current Ratio

A liquidity ratio that measures a company’s ability to pay short-term obligations with its current assets.

Current Liabilities

Short-term financial obligations that a company is required to pay within one year.