Altering Incentives So That People Take Account of the External

question 282

Multiple Choice

Altering incentives so that people take account of the external effects of their actions

• A)is called internalizing the externality.
• B)can be done by imposing a corrective tax.
• C)is the role of government in markets with externalities.
• D)All of the above are correct.

Acknowledge the limitations and appropriate use of specialized language (jargon) in business contexts.

Understand the components and purposes of various business documents.

Analyze the audience to choose the appropriate message strategy (direct or indirect).

Identify formal and informal research methods in business communication.

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Definitions:

Perfect Competitor

A hypothetical market structure in which no individual firm has any market power, allowing for an ideal level of competition where prices reflect actual costs.

Imperfect Competitor

A market participant who does not meet the conditions of perfect competition, often having some control over the price of its product or service.

MRP Schedule

A table showing the marginal revenue product (MRP) which is the additional revenue generated from using one more unit of a resource.

Perfect Competitor

A theoretical market structure where numerous small firms compete against each other and goods are perfect substitutes, leading to the inability of firms to influence prices.