External benefits create a market failure because: A. The activities that produce external benefits may not create sufficient private benefits to producers and consumers to warrant their production. B. The activities that produce external benefits only improve the lives of poor people. C. The activities that produce external benefits are too costly to produce. D. External benefits do not improve the lives of individuals. E. The activities that create external benefits may create high external costs that harm communities.

Your company is starting a new r& d initiative: a development of a new drug that dramatically reduces the addiction to smoking. the expert team estimates the probability of developing the drug succesfully at 60% and a chance of losing the investment of 40%. if the project is successful, your company would earn profits (after deducting the investment) of 9,000 (thousand usd). if the development is unsuccessful, the whole investment will be lost -1,000 (thousand usd). your company's risk preference is given by the expected utility function: u(x) v1000 +x, where x is the monetary outcome of a project. calculate the expected profit of the project . calculate the expected utility of the project . find the certainty equivalent of this r& d initiative . find the risk premium of this r& d initiative e is the company risk-averse, risk-loving or risk-neutral? why do you think so?