​If a Good Gives Rise to Substantial External Benefits to Society

question 179

True/False

​If a good gives rise to substantial external benefits to society that are associated with its production and/or consumption, then the good likely has too many resources devoted to its production.

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Definitions:

Equity Ownership

Equity ownership denotes the holding of shares in a company, thereby providing the shareholder a claim on a portion of the corporation's assets and earnings.

Corporate Takeover

The acquisition of one company by another, through either direct purchase or by acquiring a majority stake in the target company’s equity.

P/E Ratio

The price-to-earnings ratio, a measure of a company's current share price relative to its per-share earnings.

Debt-equity Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by its shareholder equity, indicating how much debt is used to finance assets.