Your State Is Considering Enacting a Law Requiring That All

question 67

Multiple Choice

Your state is considering enacting a law requiring that all motorcycle operators and their passengers wear a helmet.Motorcyclists vary in the degree to which they value being able to ride helmet-less and in the extent to which they value the safety provided by a helmet.
If ___ external costs are incurred if a cyclist is involved in an accident,the optimal level of helmet wearing will be ___ provided by private markets.

• A)zero;efficiently
• B)zero;under
• C)substantial;efficiently
• D)substantial;over

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Definitions:

Annuity Due

A type of annuity payment where payments are made at the beginning of each period, as opposed to the end.

Cash Flows

The sum totality of cash transitions in and out of a commercial operation, markedly influencing its financial fluidity.

Fixed Period

A specified duration of time during which certain conditions, agreements, or investments remain in effect or are executed.

Stated Interest Rate

The annual interest rate declared on a loan or investment, not accounting for compounding or other effects.