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galben [10]
2 years ago
6

The Coase theorem states that A) the private sector will fail to produce the efficient amount of a public good because of the fr

ee-rider problem. B) under certain conditions, private parties can arrive at the efficient solution without government involvement. C) if there are external costs in production, the government must intervene in the market to assure that the efficient level of output is produced. D) public goods should be produced up to the point where the additional benefit received by society equals the additional cost of producing the good.
Business
1 answer:
Sonja [21]2 years ago
7 0

Answer:

B

Explanation:

One of the problems in economics is the allocation of goods in the presence of externalities. When externalities are present allocation of goods in private market won't be efficient because private parties won't internalize them and would arrive to an inefficient outcome. For many years this was an argument in favor of government intervention.

However, Ronald Coase showed that assigning property rights of the externality to one of the private parties (no matter which one) would result in an efficient outcome. This is because  the parties with the property right would then internalize the cost. Then in the bargaining process private parties would reach an efficient outcome without the intervention of the government.

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When corporate taxes and the cost of financial distress are taken into consideration, the market value of a firm is equal to the
Fudgin [204]

Answer:

rise and decrease

Explanation:

  • Corporate tax is also called as company and is directly imposed by law on the incomes of capital and many countries imposed such taxes at the national levels and on the state level. Financial distress is a condition which the company make sufficient revenue and has higher fixed losses. This takes place due to some downturns.
3 0
2 years ago
Blue Spruce Corp. reported net income of $194,740 for 2022. Blue Spruce Corp. also reported depreciation expense of $36,900 and
Svetlanka [38]

Answer:

Blue Spruce Corp

Statement of Cash Flows for the year ended December 31, 2022

Operating activities section:

Net income                                          $194,740

add non-cash flow items:

    Depreciation expense                      36,900

    Loss on disposal of plant assets     54,030

Adjusted operating income             $285,670

Working capital changes:

Increase in accounts receivable         (15,650)

Increase in accounts payable              15,880

Increase in prepaid expenses             (4,250)

Net cash from operating activities $281,650

Explanation:

a) Data and Calculations:

Reported 2022 net income = $194,740

Depreciation expense = $36,900

Loss on disposal of plant assets = $54,030

Increase in accounts receivable = $15,650

Increase in accounts payable $15,880

Increase in prepaid expenses $4,250

b) The operating activities section is one section of the Statement of Cash Flows.  It shows the cash inflows and outflows from Spruce's normal business activities.  Other sections of Spruce's Statement of Cash Flows that show activities outside operating activities are the investment activities section and financing activities.

7 0
2 years ago
Which statement is FALSE regarding OSHA inspections?
jeka94

Did you ever figure out the answer, I'm stuck on this rn /:

4 0
3 years ago
Read 2 more answers
Which firm is the oligopolist? Choose one: Firm A is in retail. It is one of the largest and most popular clothing stores in the
skelet666 [1.2K]

Answer:

Firm B is in the auto rental business. It is not the nation’s largest rental company, but significant barriers to entry enable it to serve customers across the United States more conveniently and at a lower price than local rivals.

Explanation:

For the given options we considered Firm B to be treated as the oligopolist as the firm nor its competitors would have the major impact over the market also there are entry & exit barriers from the market

So the firm B should be chosen as the oligopolist

Therefore the same should be considered and relevant

3 0
2 years ago
You are considering two equally risky annuities, each of which pays $5,000 per year for 10 years. Investment ORD is an ordinary
liubo4ka [24]

Answer:

A rational investor would be willing to pay more for DUE than for ORD, so their market prices should differ.

Explanation:

If both annuities pay the same amount ($5,000 per year), then the present value of the annuity due will always be higher than the present value of the ordinary annuity. Therefore, an investor will always be willing to pay more (at equal risk) for the annuity due than the ordinary annuity.

E.g. let say that both annuities carry a 10% interest rate.

The present value of the annuity due is:

PV = $5,000 + [$5,000 x 5.7590 (PV annuity factor, 10%, 9 periods)] = $33,795

The present value of the ordinary annuity is:

PV = $5,000 x 6.1446 (PV annuity factor, 10%, 10 periods) = $30,723

The logic behind this is that $1 today is worth more than $1 tomorrow, and the annuity due's first payment is today, while the ordinary annuity's first payment is in 1 year.

4 0
3 years ago
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