The Scarcity Principle Indicates That

question 96

Multiple Choice

The scarcity principle indicates that:

• A) no matter how much one has, it is never enough.
• B) compared to 100 years ago, individuals have less time today.
• C) with limited resources, having more of "this" means having less of "that".
• D) because tradeoffs must be made, resources are therefore scarce.

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Definitions:

Return on Equity

A metric reflecting how efficiently a company turns shareholder investments into profits.

Dividend Payout Ratio

An economic indicator reflecting the proportion of a corporation's net earnings distributed to its stockholders as dividends.

Equity Multiplier

A financial leverage ratio that measures the portion of a company’s assets that are financed by stockholder's equity.

Profit Margin

The percentage of revenue that remains as income after all operating expenses, interest, taxes, and preferred stock dividends have been deducted from total revenue.