Consider Two Goods--One That Generates External Costs and Another That

question 98

Multiple Choice

Consider two goods--one that generates external costs and another that generates external benefits. The actual market outcome would

• A) result in output that is lower than the efficient output for both goods.
• B) result in output that is higher than the efficient output for both goods.
• C) result in output that is lower than the efficient output for the good with an external benefit and output that is higher than the efficient output for the good with an external cost.
• D) result in output that is higher than the efficient output for the good with an external benefit and output that is lower than the efficient output for the good with an external cost.

---

Definitions:

Financial Risk Management

The method of safeguarding a company's economic value through the utilization of financial tools to control exposure to risks, notably market risk and credit risk.

Risk Profiles

Descriptions of an individual's or organization's willingness to take risks, as well as the threats to which they are exposed.

Risk Profile

A risk profile assesses the willingness and ability of an individual or entity to take risks, often used in financial planning to tailor investment strategies.

Futures Contract

A uniform agreement to engage in a purchase or sale at a future time, with the price established beforehand.