Figure 142 Amit and Bree Are the Only Two Homeowners

question 12

Multiple Choice

Figure 14.2 Amit and Bree are the only two homeowners on an isolated private road.Both agree that installing street lights along the road would be beneficial and want to do so.Figure 14.2 shows their willingness to pay for different quantities of street lights, the market demand for street lights and the marginal cost of installing the street lights.
-Refer to Figure 14.2.The optimal quantity of street lights to install is

• A)3
• B)4
• C)6

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Definitions:

Beta

Beta is a measure of a security's volatility in relation to the overall market, indicating how much a security's price is expected to move compared to market movements.

Risk-Free Return

The theoretical return attributed to an investment that has no risk of financial loss, often represented by the yield on government securities.

Arithmetic Average Return

The sum of the returns in each period divided by the number of periods, used to calculate the mean return of an investment over a specific time frame.

Stock A

A placeholder name often used to refer to a specific, unspecified stock in hypothetical discussions.