External Costs

question 120

Multiple Choice

External costs:

• A)fall directly on an economic decision maker.
• B)fall indirectly on an economic decision maker.
• C)are imposed without compensation on someone other than the person who caused them.
• D)are both social costs and private costs.

---

Definitions:

Incentive System

A structured plan designed to motivate and encourage specific behaviors or actions among a group of people or employees.

Profit Sharing

A form of compensation whereby a percentage of company profits is distributed to the employees whose work helped generate them.