On Hot Summer Days, Electricity-Generating Capacity Is Sometimes Stretched to the Limit

question 96

Multiple Choice

On hot summer days, electricity-generating capacity is sometimes stretched to the limit. At these times, electric companies may ask people to voluntarily cut back on their use of electricity. On these days, electricity is

• A)excludable, but nonrival in consumption.
• B)not excludable, but rival in consumption.
• C)excludable and rival in consumption.
• D)not excludable and nonrival in consumption.

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Definitions:

Common Stock

A form of corporate equity ownership, a type of security representing ownership in a corporation.

Dividend

A payment made by a corporation to its shareholders, usually derived from the company’s profits.

Preferred Stock

A class of ownership in a corporation that has a higher claim on assets and earnings than common stock, usually with dividends that are paid out before those of common shareholders.

Common Stock

Shares representing ownership in a corporation, giving holders voting rights and a claim on a portion of the company’s profits through dividends.