Division of Knowledge, as Discussed in the Text, Increases Economic

question 51

Multiple Choice

Division of knowledge, as discussed in the text, increases economic prosperity because: I. Each person can develop extensive knowledge about a single activity. II. The human brain's capacity to know everything about all productive activities is limited. III. Specialized knowledge increases productivity, which increases total output.

• A) I and II only
• B) I and III only
• C) II and III only
• D) I, II, and III

---

Definitions:

Voting Rights

The rights of shareholders to vote on key corporate decisions, such as the election of the board of directors.

Preemptive Rights

The rights that give existing shareholders the opportunity to buy additional shares of a company's new stock issue before the public, maintaining their percentage of ownership.

Retained Earnings

The portion of net income that is retained by the corporation rather than distributed to its owners as dividends, typically used for reinvestment in the business or paying down debt.

Stockholders' Equity

The remaining interest in a company's assets after all debts have been subtracted, indicating the owners' stake.