Activities That Provide External Benefits

question 86

Multiple Choice

Activities that provide external benefits

• A) should be taxed so that the recipients of the benefits pay for them; otherwise inefficiency will result.
• B) may be subsidized by the government to give decision makers an incentive to consider increasing their consumption.
• C) will not result in inefficiency if those benefits are not considered.
• D) all of the above

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Definitions:

Earnings Per Share

A metric that calculates the portion of a company's profit allocated to each outstanding share of common stock, indicating a company's profitability.

Treasury Stock

Shares that were issued and subsequently reacquired by the company, reducing the amount of outstanding stock on the open market.

Cash Dividends

Payments made by a corporation to its shareholder members from its profits or reserves.

Return on Equity

An indicator of a company's financial performance, indicating the amount of profit generated from the investments made by its shareholders.