In the Context of the Fair, Isaac and Company (FICO)

question 46

Multiple Choice

In the context of the Fair, Isaac and Company (FICO) score, a score between 600 and 699 indicates a(n) _____ creditworthiness.

• A) poor to below average
• B) below average to fair
• C) fair to good
• D) excellent

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Definitions:

Negative Externality

A cost imposed without compensation on third parties by the production or consumption of sellers or buyers. Example: A manufacturer dumps toxic chemicals into a river, killing fish prized by sports fishers. Also known as an external cost or a spillover cost.

Spillover Cost

A cost incurred by someone who is not a direct participant in a transaction, often referring to negative externalities resulting from economic activities.

Allocative Efficiency

occurs when resources are distributed in a manner that results in the optimal combination of goods and services produced to match consumer preferences.

Productive Efficiency

The production of a good in the least costly way; occurs when production takes place at the output level at which per-unit production costs are minimized.