The Distribution of Rights Among Parties Affected by an Externality

question 115

Multiple Choice

The distribution of rights among parties affected by an externality:

• A)hinders the ability of private parties to properly price the externality
• B)enhances the market incentive to reach an efficient solution
• C)determines who bears the cost of the solution but has no effect on the efficiency of this outcome
• D)affects the efficiency of the outcome, but does not determine who bears the cost

---

Definitions:

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often accompanied by prejudice against others.

Facts

Statements or information that are true and can be verified or proven.

Cognitive Origin

The beginning or root of a thought process in the human mind.

Stereotype

A common, yet rigid and simplified conception of a specific kind of individual or object.