A benefit to society of the patent and copyright laws is that those laws
a. help to keep prices down.
b. help to prevent a single firm from acquiring ownership of a key resource.
c. encourage creative activity.
d. discourage the production of inefficient products.
c
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Which of the following is NOT a result of the double taxation of dividends?
A) Because profits that firms distribute to stockholders are taxed a second time, firms have an incentive to retain profits rather than to distribute them to stockholders. B) The return investors receive from buying stocks is reduced, which reduces the incentive people have to save in the form of stock investments and increases the costs to firms of raising funds. C) It gives firms an incentive to take on what may be an excessive level of debt rather than issue stock. D) The decline in retained profits results in increased inefficiency.
Refer to Scenario 5.5. Which of the following statements is true?
A) The expected cost of not fixing the car is less than the cost of fixing it. B) The expected cost of not fixing the car is greater than the cost of fixing it. C) It is not possible to tell whether the expected cost of fixing the car is less than the cost of fixing it, because the probabilities are subjective. D) It is not possible to tell whether the expected cost of fixing the car is less than the cost of fixing it, because the probabilities are not equal.