Reference: Ref 10-7 (Figure: Softella) the Figure Shows a Market

question 61

Multiple Choice

Reference: Ref 10-7 (Figure: Softella) The figure shows a market for medicated tissues. Assume that the only use for these tissues is to wipe and clean one's hands thus preventing germs from spreading to other people. What is the dollar amount of the external benefit (per box) that is created by the use of this product?

• A) $24
• B) $12
• C) $8
• D) $16

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Definitions:

Optimal Risky Portfolio

An optimal risky portfolio is a collection of financial assets that maximizes expected return for a given level of risk or minimizes risk for a given level of expected return.

Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two variables on a scatter plot.

Correlation Coefficient

A statistical measure that calculates the strength of the relationship between the relative movements of two variables.

Standard Deviation

A measure of the dispersion or variability of a set of data points or investment returns, indicating the degree of risk.