Suppose a Firm's CFO Thinks That an Externality Is Present

question 52

True/False

Suppose a firm's CFO thinks that an externality is present in a project, but that it cannot be quantified with any precision⎯estimates of its effect would really just be guesses.In this case, the externality should be ignored⎯i.e., not considered at all⎯because if it were considered it would make the analysis appear more precise than it really is.

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Definitions:

Technology

The use of scientific understanding for real-world applications, particularly in the industrial sector.

B.F. Skinner

An influential American psychologist best known for his work in behaviorism and the development of the theory of operant conditioning.

Margaret Mead

An American cultural anthropologist known for her studies and writings on cultural phenomena and her influence on the field of anthropology.

Formal Education

A structured system of learning provided by institutions like schools and universities, focusing on theoretical knowledge and practical skills development.