When There Is a Positive Externality

question 40

Multiple Choice

When there is a positive externality,

• A)the marginal private benefit received by consumers is greater than the external benefit.
• B)the marginal social benefit received by consumers is greater than the marginal private benefit.
• C)the marginal private benefit received by consumers is greater than the marginal private cost.
• D)the marginal private benefit received by consumers is greater than the marginal social benefit.

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Definitions:

Dividends

Payments made by a corporation to its shareholder members, derived from the company's profits.

Excess Solvency

refers to the situation where a company holds significantly more assets or financial reserves than the minimum required by regulators to cover its liabilities and potential claims.

Proxy

A form of authorization given by a shareholder or other party allowing another person to vote or act on their behalf, often used in corporate settings.

Corporate Matters

Issues or affairs related to the governance, management, and regulatory compliance of corporations.