The Concept of Homemade Dividends Requires the Following

question 8

Multiple Choice

The concept of homemade dividends requires the following:
I.No taxes, transactions costs, or other market imperfections.
II.Management cooperation to implement.
III.The actions of individuals through their own behaviour

• A)I
• B)II
• C)III
• D)I and III

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Definitions:

Perfect Substitutes

Goods or services that can be used in place of each other with no loss of utility to the consumer.

Perfect Complements

Two goods for which the Marginal Rate of Substitution (MRS) is zero or infinite; the indifference curves are shaped as right angles.

Good X

A generic term often used in economic models to represent a specific product or commodity in the market.

Market Baskets

A collection of goods and services used as a standard way of tracking the cost of living or inflation over time.