Efficiency in Risk Bearing Implies That

question 65

Multiple Choice

Efficiency in risk bearing implies that

• A) risk is completely eliminated.
• B) the least risk-averse party bears most of the risk.
• C) the most risk-averse party bears most of the risk.
• D) all of the risk is borne by just one of the parties regardless of the degree of risk aversion.

---

Definitions:

Isolated Environment

A setting or condition that is detached or separate from others, often used to control variables in experiments or to ensure security.

Fixed-Position Layout

A layout that brings all resources required to create the product to a central location.