Dividends

question 105

Multiple Choice

Dividends:

• A) always affect net income
• B) are distributions to shareholders of assets (usually cash) generated by net income
• C) are expenses
• D) must be paid to shareholders when the company earns a profit

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Definitions:

Deadweight Loss

See efficiency loss.

Marginal Cost

The increase in expenditure incurred from making one more unit of a product or service.

Marginal Benefit

The extra benefit or utility received from the consumption or production of an additional unit of a product or service.

Public Goods

Goods or services that are available for consumption by everyone and where use by one individual does not reduce availability to others.