Statement I: External Costs Are Market Failures,but External Benefits Are

question 254

Multiple Choice

Statement I: External costs are market failures,but external benefits are not.
Statement II: The U.S.government provides the legal system under which our free enterprise economy can operate.

• A)Statement I is true and statement II is false.
• B)Statement II is true and statement I is false.
• C)Both statements are true.
• D)Both statements are false.

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Definitions:

Trust Instrument

A legal document that creates a trust, specifying the terms, trustees, beneficiaries, and purpose.

Trust's Purpose

The specific objectives or intentions for which a trust is established, guiding how the trust's assets are to be managed and used.

Constructive Trust

An equitable remedy resembling a trust, imposed by a court in order to benefit a party that has been unjustly enriched at another's expense, even though no actual trust has been created by the parties.

Legal Title

The formal right of ownership of property, recognized and protected by law, which may not necessarily entail the possession or use of the property.