Smoking Tobacco Creates a ________ Externality

question 69

Multiple Choice

Smoking tobacco creates a ________ externality.

• A)negative consumption
• B)negative production
• C)positive consumption
• D)positive production
• E)none of the above

---

Definitions:

Initial Outlays

The initial investments or costs incurred when starting a project, business, or investment.

Net Present Value

A financial measure that assesses an investment's profitability by calculating the difference between the present value of cash inflows and the present value of cash outflows throughout a certain timeframe.

Internal Rate of Return

The discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Cost of Capital

The rate of return a company must pay investors to finance its assets, often used as a benchmark to evaluate the profitability of investments.