When Private Ownership of a Resource Is Clearly Defined and Enforced

question 116

Multiple Choice

When private ownership of a resource is clearly defined and enforced, the private owner

• A) has little incentive to consider the wishes of others when deciding how to use the resource.
• B) has little incentive to take care of the resource.
• C) has a strong incentive to use the resource wisely and to consider seriously the wishes of others when deciding how to employ the resource.
• D) has a strong incentive to consume the resource during the period rather than conserving it for future use.

---

Definitions:

Free Cash Flow

The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Cash Reinvested

Funds that a company allocates back into its business for growth purposes, such as expanding operations or purchasing new equipment.

Net Cash Flow

The disparity between what a business earns and spends in cash over a designated timeframe.

Dividend Payments

The portion of a company's earnings that is distributed to shareholders, usually in the form of cash or additional shares.