An Externality Arises When a Person Engages in an Activity

question 464

Multiple Choice

An externality arises when a person engages in an activity that influences the well-being of

• A)buyers in the market for that activity and yet neither pays nor receives any compensation for that effect.
• B)sellers in the market for that activity and yet neither pays nor receives any compensation for that effect.
• C)bystanders in the market for that activity and yet neither pays nor receives any compensation for that effect.
• D)Both (a) and (b) are correct.

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Definitions:

Company Rules

The formal guidelines and regulations that govern behavior and procedures within an organization.

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The intangible asset that arises when a business is valued at more than its tangible assets, often due to reputation, brand, or customer loyalty.

Informal Work Culture

A workplace environment characterized by a casual approach to professional interactions, dress code, and office policies, emphasizing comfort and personal expression.

Communications Executive

A senior-level professional responsible for overseeing an organization's internal and external communication strategy, including media relations and messaging.