Suppose That a Nation Can Only Make Two Products: Defense

question 126

Multiple Choice

Suppose that a nation can only make two products: defense goods and civilian goods. In a graph of the marginal benefit (MB) and marginal cost (MC) of defense goods, a leftward shift of the MB curve will cause the optimal quantity of:

• A) Civilian goods to decrease
• B) Both civilian goods and defense goods to decrease
• C) Defense goods to decrease
• D) Defense goods to increase

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Definitions:

Common Stock Dividends

Payments made to shareholders of a company's common stock, usually from the company's earnings.

Cumulative

Refers to an amount that has increased over time by adding successive increments, often used in context of dividends or data.

Non-Cumulative

Refers to dividends or other types of distributions that, if not paid by a company in a given period, are not required to be paid at all.

Dividend Yield

The ratio that indicates how much dividends a company issues each year in relation to the price of its shares.