FINANCE 6081 -Although the marginal cost of producing a pure public

Answer questions 1 & 2 with at least 250 word. Answer questions 3 & 4 with at least 150 words per. Please be clear the response and list applicable references.

1. Although the marginal cost of producing a pure public good is always positive, some consumers can enjoy the benefits of pure public goods at zero marginal costs. Explain the apparent paradox, if one actually exists.

2. The states currently have a law in place requiring them to maintain a balanced budget. Do you believe this should be required of the federal government as well? Why, or why not? What might be the ramifications if this philosophy drove the federal budget?

3. In the past decade, there have been many news stories about the financial misconduct of some executives of several major corporations. What is the role of corporate financial officers in plotting the course of the corporation and ensuring that the corporation's legal and ethical conduct is proper? What tools can these corporate financial officers use to influence corporate legal and ethical conduct?

4. Diversification is supposed to reduce risks. What does diversification mean in the context of corporate finance, and how does it reduce risks in that context? How would a corporation determine the optimal level of diversification?