We Are the World Is an Importing Company That Specializes

question 2

Multiple Choice

We Are the World is an importing company that specializes in importing hand-made arts and crafts from crafters and artisans around the world. The company has about $4 million worth of stock outstanding. Due to its desire to avoid double taxation, it is structured so that its individual shareholders pay taxes on all of the company's income. The shareholders report the flow-through of income and losses on their personal tax returns and are assessed at their individual tax rates. We Are the World is a(n)

• A) C corporation.
• B) G corporation.
• C) S corporation.
• D) limited liability company (LLC).
• E) investment trust.

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Definitions:

Marginal Social Benefit

The additional benefit to society as a whole from producing one more unit of a good or service.

Individual Marginal Benefits

The additional satisfaction or utility that an individual gains from consuming one more unit of a good or service.

Consumer

An individual or group that purchases goods or services for personal use.

Marginal Cost

The cost of producing one additional unit of a good or service, which is used in determining the optimal production level.