Externalities Can Be Internalized Through Voluntary Agreements as Long as

question 165

Multiple Choice

Externalities can be internalized through voluntary agreements as long as

• A)transaction costs are low relative to expected benefits.
• B)transaction costs are high relative to expected benefits.
• C)the agreement is a short-run agreement.
• D)the agreement is a long-run agreement.

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Definitions:

Restrictive Covenant

A clause in a contract which limits certain actions of one or both parties, often used in employment and real estate agreements to protect business interests.

Picket Line

A boundary established by workers on strike, especially at the entrance to the place of work, intended to dissuade or prevent others from entering or leaving.

Canada Labour Code

Federal legislation that regulates employment standards, labour relations, and workplace health and safety in Canada.

Legal Obligation

A duty enforced by law, requiring an individual or organization to follow a specific course of action.