Which of the Following Is Not Considered a Transaction Cost

question 56

Multiple Choice

Which of the following is not considered a transaction cost incurred by parties in the process of contracting to eliminate a pollution externality?

• A) Costs incurred due to lawyers' fees.
• B) Costs incurred to reduce the pollution.
• C) Costs incurred to enforce the agreement.
• D) Costs incurred due to a large number of parties affected by the externality.
• E) All of these answers are considered transaction costs.

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Definitions:

Affiliation Needs

A person's need to feel a sense of involvement and belonging within a social group.

Security Needs

A level in Maslow's hierarchy of needs, focusing on the desire for safety, stability, and protection from physical and emotional harm.

Affiliation Needs

The human desire to form and maintain interpersonal relationships, connections, and a sense of belonging.

Safety Needs

Basic human needs for security and protection from harm, as identified in Maslow's hierarchy of needs, following physiological needs.