If Education Creates Positive Externalities

question 129

Multiple Choice

If education creates positive externalities,

• A)private markets provide less than the socially optimal quantity of education
• B)private markets provide more than the socially optimal quantity of education
• C)the marginal private benefit curve is higher than the marginal social benefit curve
• D)the marginal private cost curve is higher than the marginal social cost curve
• E)the government should impose a depletion tax

Grasp the concept of earnings growth and its relation to price valuations and investor expectations.

Understand the importance and application of profitability ratios such as Return on Assets (ROA) and Return on Equity (ROE).

Calculate and analyze short-term liquidity ratios like the current ratio and the interval measure.

Interpret efficiency ratios including total asset turnover, inventory turnover, and receivables turnover.

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Definitions:

GAAP

Generally Accepted Accounting Principles; the standard framework of guidelines for financial accounting used in any given jurisdiction, commonly used in the United States.

Business Entity Assumption

An accounting principle that treats a business as a separate legal entity from its owners, requiring separate accounting records.

Personal Financial Information

Data related to an individual's finances, including income, debt, investments, and credit history.

Sole Stockholder

An individual or entity that is the only owner of all the shares of a company.