Property Trusts

question 23

Multiple Choice

Property trusts:

• A) are taxpaying entities.
• B) can make tax-deferred distributions to individual unitholders who benefit differentially on an after-tax basis depending on their personal marginal tax rate.
• C) can withhold income distributions to unitholders in any year depending on the trusts expected cash flow requirements for the following period.
• D) both b and c

---

Definitions:

Constant Returns to Scale

A situation in production where increasing the amount of inputs results in a proportional increase in the output.

Long-run Total Costs

The aggregate expenses a firm incurs in the production of goods or services when all factors of production are variable.

Average-total-cost Curve

A graphical representation showing the average total cost of producing different quantities of a good or service, illustrating how costs vary with changes in output.

Average-fixed-cost Curve

A graphical representation showing how the average fixed cost of production decreases as the quantity of output increases.