When There Is a Resource for Which Property Rights Are

question 298

Multiple Choice

When there is a resource for which property rights are NOT well defined and there is a difference between private costs and social costs, then all but which of the following is a way to close the difference?

• A) the free market system
• B) taxation
• C) subsidization
• D) regulation

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Definitions:

Average Invested Capital

The average amount of money invested in a company over a certain period, used to evaluate the company's financial performance.

Investment Turnover

An indicator of how effectively an organization is using its invested capital to produce income.

Profit Margin

A financial metric that measures the amount of net income earned with each dollar of sales generated, expressed as a percentage.

Return On Investment

A performance measure used to evaluate the efficiency or profitability of an investment or to compare the efficiency of several different investments.