Economists Use the Term Equilibrium to Describe When

question 214

Multiple Choice

Economists use the term equilibrium to describe when:

• A)individuals are equal.
• B)no individual would be better off taking a different action.
• C)no individual has an incentive to change his or her behavior.
• D)no individual would be better off taking a different action or no individual has an incentive to change his or her behavior.

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Definitions:

Weighted Average Cost of Capital (WACC)

The average rate of return a company is expected to pay its securities holders, weighted by the proportion each financing source contributes to the total capital structure.

Corporate Tax Rates

The percentage of corporate profits taken as tax by the government.

After-Tax Cost

The net cost of an investment or transaction after considering the effects of taxes on its overall expenses or returns.