Parties Affected by Externalities Have an Incentive to Negotiate as Long

question 55

Multiple Choice

Parties affected by externalities have an incentive to negotiate as long as

• A) the cost of the negotiation is less than the surplus that could be gained.
• B) the cost of the negotiation is greater than the surplus that could be gained.
• C) the cost of the negotiation is equal to the surplus that could be gained.
• D) there is no surplus.
• E) the surplus is positive regardless of the cost.

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Definitions:

Primary Circular Reactions

Early repetitive behaviors of infants, focused on the infant’s own body, that serve as the building blocks of sensory and motor development.

Tertiary Circular Reactions

The stage in Piaget's theory of cognitive development where infants aged 12 to 18 months demonstrate trial and error experimentation, showing a more sophisticated understanding of cause and effect.

Mental Representations

Internal cognitive symbols, models, or maps of the world, phenomena, or concepts that the mind constructs for understanding and navigating the environment.

Object Permanence

The understanding that objects continue to exist even when they cannot be seen, heard, or otherwise sensed, a critical concept in the cognitive development of infants.