Refer to the graph. Which of the three Security Market Lines would represent a situation where investors do not care about the risk level of a financial asset?

Suppose that flu shots create a positive externality equal to $12 per shot. What is the relationship between the equilibrium quantity and the socially optimal quantity of flu shots produced?

a. They are equal. b. The equilibrium quantity is greater than the socially optimal quantity. c. The equilibrium quantity is less than the socially optimal quantity. d. There is not enough information to answer the question.

Suppose tastes are NOT monotonic anywhere. Then diminishing MRS is not consistent with convexity of tastes.

Answer the following statement true (T) or false (F)