Which of the Following Creates an Incentive to Increase the Amount

question 117

Multiple Choice

Which of the following creates an incentive to increase the amount of an activity?

• A) an increase in the marginal cost of the activity and a decrease in the marginal benefit of the activity
• B) a decrease in the marginal cost of the activity and an increase in the marginal benefit of the activity
• C) constant marginal cost and constant marginal benefit of the activity
• D) None of the above create an incentive to increase the amount of an activity.

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Definitions:

Dividend Revenue

Income received from owning shares in a company, typically paid out from the company's profits.

Investing Activities

Investing activities involve the purchase and sale of long-term assets and other investments, not including cash equivalents, as part of a company’s capital allocation strategy.

Short-term Investments

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business cycle, whichever is longer.

Cash Dividends

Payments made by a corporation to its shareholders out of its profits or reserves.