When There Are Positive Externalities Associated with the Consumption of a Good,we

question 95

Multiple Choice

When there are positive externalities associated with the consumption of a good,we can expect:

• A)the private demand curve to lie above the social demand curve.
• B)the private supply curve to lie below the social supply curve.
• C)the private supply curve to lie above the social supply curve.
• D)the private demand curve to lie below the social demand curve.
• E)the private demand curve to lie below the social supply curve.

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Definitions:

Risk-free Interest Rate

The risk-free interest rate is the return on investment with no risk of financial loss, typically represented by the yields of government bonds of stable countries.

Gold Futures

Contracts for the future delivery of gold at a specified price, used for hedging and investing purposes.

Arbitrage Profit

The profit made from buying and selling equivalent financial instruments or capitalizing on price differences in different markets to generate a risk-free return.

Risk-free Rate

The theoretical rate of return of an investment with zero risk, typically associated with government bonds.