Use the Following Statements to Answer This Question

question 22

Multiple Choice

Use the following statements to answer this question:
I. Stock externalities depend on the accumulated results of actions by producers or consumers, not on the incremental results that may occur in a given period of time.
II. Stock externalities are always negative externalities.

• A) I and II are true.
• B) I is true and II is false.
• C) II is true and I is false.
• D) I and II is false.

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Definitions:

Adverse Selection

A situation where asymmetric information leads to the selection of poor-quality or unsuitable candidates or products, commonly seen in insurance and market transactions.

Secretary

A professional responsible for managing administrative tasks and facilitating smooth operations within an organization.

Trained

Refers to individuals who have received instruction or education in a specific skill or field.

Adverse Selection

A situation in economics where buyers and sellers have different information, leading to transactions where one party may be at a disadvantage, often discussed in insurance markets.