The owners of a firm are residual income claimants. How does their property right to the residual

Question:

The owners of a firm are residual income claimants. How does their property right to the residual income affect their incentive to.

(a) Produce efficiently and keep cost low

(b) Supply goods that consumers value highly relative to cost? Why is this important?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Economics Private And Public Choice

ISBN: 9780357133996

17th Edition

Authors: James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson

See More Books

Question Posted: Oct 17, 2023 10:01 AM

See More Questions

Planning is one of the most important management functions in any business. A front office managers first step in planning should involve determine the departments goals. Planning also includes...
1. How strong are the competitive forces confronting J. Crew in the market for specialty retail? Do a [Michael Porter] five-forces analysis to support your answer. (see chapter 3 in the textfor...
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
Explain why a decline in investment spending caused by a change in business expectations leads to a fall in consumer spending.
The Absco Corporation has requested that Herb Germany, CPA, provide a report to the Northern State Bank as to the existence or nonexistence of certain loan conditions. The conditions to be reported...
When using the high-low method, should you base the high and low observations on the dependent variable or on the cost driver?
What is the statement of retained earnings, and what information does it provide? AppendixLO1
Picasso Company is a wholesale distributor of professional equipment and supplies. The companys sales have averaged about $900,000 annually for the 3-year period 20122014. The firms total assets at...
The summaries of data from the balance sheet, income statement, and retained earnings statement for two corporations, Walco Corporation and Gunther Enterprises, are presented below for 2022....
Which of the following statements do you think reflect sound economic thinking? Explain your answer. a. I paid $1,800 for this economics course. Therefore, Im going to attend the lectures even if...
Sue loves ice cream but cannot stand frozen-yogurt desserts. In contrast, Carole likes both foods and can hardly tell the difference between the two. Who will have the more elastic demand for yogurt?
One hundred and six adults are randomly selected and tested for their body temperatures. Based on that sample, researchers estimated that the average (mean) body temperature is 98.2 o F with a margin...
4. Assume that G and T are exogenous, and C is determined by the standard. consumption function, but that investment is now endogenous and responds to income: I = b + bY. Assume c + b < 1. (a)...
4. You have decided it's time to buy a house, and you have found the one you want. The price is $500,000, and you will pay 10% in cash and will take a mortgage on the balance. The annual interest...
Differentiate. G(x) = (2x+3) (9x+ (x) G'(x)=
Consider the following C functions and assembly code: int fun4 (int *ap, int *bp) ( int a = *ap; int bbp; return a+b; }) pushl ebp movl esp, ebp int fun5 (int *ap, int *bp) { int bbp; *bp + *ap;...
The position of a particle moving along the x-axis is given by x(t) = = 4.2 2.5t m. (Assume t is in seconds.) (a) At what time (in s) does the particle cross the origin? 1.68 S (b) What is the...
A package delivery company provides both overnight and second-day delivery services. It charges almost twice as much to deliver an overnight package to any world location as it does to deliver the...
If the jobs displayed in Table 18.24 are processed using the earliestdue-date rule, what would be the lateness of job C? TABLE 18.24 Processing Times and Due Dates for Five Jobs Job C D E...
When mortgage originators sell mortgages to Fannie Mae, Freddie Mac, and investment banks the originators have no additional liability for possible default by the borrower. How will this arrangement...
What happened to the credit standards (e.g., minimum down payment, mortgage loan relative to the value of the house, and creditworthiness of the borrower) between 1995 and 2005? Why did the credit...
If owners have little or no equity in their houses, how will this influence the likelihood that they will default on their mortgage? Why?
Following is a series of independent cases . In each situation, indicate the cash distribution to be made to partners at the end of the liquidation process. Unless otherwise stated, assume that all...
ASSETS LIABILITES AND EQUITY TII TTI TIT TTT EXPENSES REVENUES Inceresumman T T
. In explain the problem Distinguish between a meteor, a meteoroid, a meteorite, an asteroid, and a comet

The owners of a firm are residual income claimants. How does their property right to the residual

Question:

Step by Step Answer:

The owners of a firm as residual income claimants have a direct interest in the firms financial performance and profitability Residual income in the context of a firm refers to the income that remains ...View the full answer

Economics Private And Public Choice

Students also viewed these Business questions