Answer:
If consumption of a good gives rise to a negative externality, it can be internalized by subsidizing the purchase of the good.
Explanation:
The effect of a market exchange on a third party who is outside or “external” to the exchange is called an externality or spill over.
Negative externality are negative spill over effects of a transaction, a situation where a third party, outside the transaction, suffers from a market transaction by others
.
Internalizing the externality means <u>shifting the burden, or costs, from a negative externality</u>, such as pollution or traffic congestion, from outside to inside (external to internal). This can be done through taxes, property rights, tolls, and government subsidies.
A negative externality exists is the cost of production exceeds private costs
Hence, such negative externality can be internalized through subsidy by the government
Answer:
The correct answer is letter "E": Entrepreneurs.
Explanation:
Entrepreneurs are individuals with special sights for investments. They tend to look for new ways of doing typical activities and by innovation set a business plan for a potential good or service to be offered to the public or a specific market. They find ways to use factors of productions to achieve the venture's goal.
Answer:
comparative advertising
Explanation:
Comparative advertising is a marketing strategy where the product or service of the company would be represented as a superior good as compared to the competitor. It compared the features of the company to the competitor
Since in the given situation, it is mentioned that the guest explains to her than tums should be different as it the antacid brand that contains only calcium
So, the above represent the answer
Changes in commodity prices
Answer:
The average expected rate of return on the market portfolio is 10 percent.
Explanation:
The CAPM (fixed asset pricing) model describes the relationship between systematic risk and expected return on assets, especially stocks. CAPM is widely used throughout the financial community to value high-risk securities and achieve the expected returns on assets when taking into account the risk of those assets and the cost of capital.
The formula for calculating the expected return on an asset taking into account its risk is as follows:
ERi = Rf + βi (ERm - Rf)
where:
ERi = expected return on investment
Rf = risk-free interest rate = 4 percent.
βi = beta inversion =1.0
(ERm −Rf) = market risk premium = 6 percent.
ERi = 4 + 1 ×(6) =10
The average expected rate of return on the market portfolio is 10 percent.