The Basic Postulate of Economics Indicates That Changes in Incentives

question 250

Multiple Choice

The basic postulate of economics indicates that changes in incentives influence the:

• A) actions of producers but not consumers.
• B) actions of consumers but not producers.
• C) choices of individuals only when they buy and sell goods in the marketplace.
• D) choices of individuals with regard to a wide range of activities, including those generally perceived as social or political.

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Definitions:

Liquidating Dividend

A type of dividend paid by a company from its capital rather than its earnings, often during dissolution or winding down.

Date of Record

The cut-off date set by a company in order to determine which shareholders are eligible to receive a dividend or distribution.

Earnings Per Share

Earnings per share (EPS) is a financial metric that represents the portion of a company's profit allocated to each outstanding share of common stock, indicating the company's profitability.

Excess Cash

The amount of cash holdings that exceed the normal operational needs of a company.