If Consumption of a Good by One Person Imposes Costs

question 91

Multiple Choice

If consumption of a good by one person imposes costs on a party other than the producer,

• A)the consumption creates a positive externality
• B)the good is a public good
• C)the consumption creates a negative externality
• D)too little of the good is produced from society's point of view
• E)the market will correct the problem if left alone

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, usually in the form of cash or stock, representing a share of the corporate profits.

Retained Earnings Account

An equity account on the balance sheet that represents the accumulated net income of a company that has not been distributed to shareholders as dividends.

Net Income

The amount of profit remaining after all expenses, taxes, and costs have been subtracted from total revenue.

Dividends Declared

Profit distributed to shareholders that the company's board of directors has committed to pay out.