Page 164 - RISK Management IC 86

Risk Management

A bar chart is constructive by drawing vertical and
horizontal, parallel bars of equal width and of lengths
proportional to the frequency of the particular classes.
Pie charts are useful ways of illustrating the relative
frequency of the components of the components of a
subject ,a circle being split into segments representing
the relative frequency of each category.

(c) Private Costs and Social Costs - Private Costs are those
costs necessarily incurred by individual or firm engaging
in a particular activity. There also might be other activities
whose costs fall back upon the society or community at
large.

This is called Social Costs. For e.g, A manufacturing
company have to meet the costs of raw materials, labour,
and other inputs which appears in its book of accounts.
But during the production process, if it discharges
untreated effluents into adjacent water bodies or smoke
in the air, the cost of cleaning those amenities fall upon
the community.

The law decides whether these social costs can be borne
by the principal. In fact nowadays the Government has
become strict and have made laws to force the firms to

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