A Familiar Example of a Negative Externality Is Loud Music

question 110

Multiple Choice

A familiar example of a negative externality is loud music on a college campus.In principle, it should be possible to internalize this externality by permitting students to negotiate about rights to play music during particular time periods.The most likely reason that this does not happen is that:

• A)most students are unfamiliar with the Coase theorem.
• B)the transaction costs associated with identifying and establishing communication with students would be high.
• C)agreements arising from such negotiations could not be enforced.
• D)most students don't view loud music as a negative externality.

---

Definitions:

Performance Objectives

Specific goals set for an individual or team to achieve, often used to measure work performance.

Cost

The value or price associated with acquiring, producing, or maintaining goods or services.

Absenteeism

The habitual non-presence of an employee at their job, which can be due to various reasons such as illness, personal issues, or lack of job satisfaction, negatively impacting productivity.

Performance Reviews

Formal assessments where an employee's work performance is evaluated and discussed to identify strengths and areas for improvement.