Bridget Drinks Three Sodas During a Particular Day

question 98

Multiple Choice

Bridget drinks three sodas during a particular day.The marginal benefit she enjoys from drinking the third soda

• A)can be thought of as the total benefit Bridget enjoys by drinking three sodas minus the total benefit she would have enjoyed by drinking just two sodas.
• B)determines Bridget's willingness to pay for the third soda.
• C)is likely different from the marginal benefit provided to Bridget by the second soda.
• D)All of the above are correct.

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Definitions:

Return Of Capital

A payment to investors that returns some of their original investment, thus reducing the investor's cost basis in the investment.

Capital Gain

The profit earned from the sale of an asset that has increased in value over its purchase price, often applied to stocks, bonds, and property.

Stockholder Basis

The amount invested in a company's stock, used for tax purposes to determine gain or loss on the sale or disposition of the stock.

Taxable Income

The sum of earnings that determines the tax liability of a person or business to the government, once all deductions and exemptions have been applied.