The Fair Rules Approach to Fairness Requires

question 142

Multiple Choice

The fair rules approach to fairness requires

• A) consumer surplus equals producer surplus.
• B) income transfers from rich to poor.
• C) property rights and voluntary exchange.
• D) that marginal cost equal marginal benefit.
• E) consumer surplus exceed producer surplus because there are more consumers than producers.

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Definitions:

Share Capital

The total value of a company's shares of stock that have been issued to shareholders.

Retained Earnings

The portion of net earnings not distributed as dividends to shareholders, but retained by the company to reinvest in its core business or to pay debt.

Contributed Surplus

Contributed Surplus is an equity account that reflects excess amounts received by a company over the par value of its stock from the sale of shares directly to investors.

Common Shares

Equity investments that represent ownership in a company, granting holders voting rights and a share in the company's profits through dividends.