Suppose That a Private-Sector Firm Produces Two Goods: Good 1

question 113

Multiple Choice

Suppose that a private-sector firm produces two goods: Good 1 is a private good and Good 2 is a public good. Which of the following statements is TRUE?

• A) If a consumer spends more money on Good 1, she gets more Good 1.
• B) If a consumer spends more money on Good 2, she gets more Good 2.
• C) If a consumer spends less money on Good 1, she gets less Good 2.
• D) If a consumer spends less money on Good 2, she gets less Good 1.

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Definitions:

Cash Dividend

A distribution of a company's earnings to its shareholders, typically in the form of cash.

Comparative Balance Sheet

A financial statement that presents the financial position of a company at two or more different points in time.

Operating Activities

Day-to-day actions that are involved in running a business, such as selling products, managing costs, and paying employees.

Cash Dividend

A disbursement issued to shareholders from a firm's profits, often in cash format.