When GD Inc

question 56

Multiple Choice

When GD Inc.declared a dividend of $20,000,000,its market value increased from $8 billion to $8.5 billion.However,it lost a chance to reinvest $20,000,000 in the research and development of a new product which would have earned a profit of $200 million.Thus,this $200 million is referred to as GD Inc.'s

• A) producer surplus.
• B) consumer surplus.
• C) opportunity cost.
• D) social cost.

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Definitions:

Quotas

Restrictions set by governments on the amount of a certain good that can be imported or exported.

World Price

The price of a good that is traded on the global market.

Imported

Products or services that are brought into one country from another for sale.

Tariff

A tax imposed by a government on goods and services imported from other countries, often used to protect domestic industries from foreign competition.