Use the Following Information to Answer the Question(s)below

question 37

Multiple Choice

Use the following information to answer the question(s) below.
On December 31,2010,Giant Corporation's Investment in Penguin Corporation account had a balance of $500,000.The balance consisted of 80% of Penguin's $625,000 stockholders' equity on that date.Giant owns 80% of Penguin.On January 2,2011,Penguin increased its outstanding common stock from 15,000 to 18,000 shares.
-Assume that Penguin sold the additional 3,000 shares directly to Giant for $150,000 on January 2,2011.Giant's percentage ownership in Penguin immediately after the purchase of the additional stock is

• A)66-2/3%.
• B)80%.
• C)83-1/3%.
• D)86-2/3%

Comprehend the concept of transaction costs in resolving externality problems.

Differentiate between pollution permits and corrective taxes in internalizing externalities.

Discuss the economic efficiency of corrective taxes versus pollution regulation.

Understand the mechanisms and effects of tradable pollution permits in pollution management.

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Definitions:

Nearsightedness

A common vision condition where objects nearby are seen clearly, but distant objects appear blurred, also known as myopia.

Glaucoma

Irreversible damage to the optic nerve caused by increased pressure in the eye.

Myopia

Nearsightedness.

Physical Losses

The reduction or disappearance of physical assets, health, or capabilities.