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.

---

Definitions:

UV Radiation

Ultraviolet radiation, a type of electromagnetic radiation that comes from the sun and artificial sources, known for its ability to damage skin cells and cause sunburn.

Melanin

A natural pigment found in the skin, hair, and eyes that determines color and provides protection against ultraviolet radiation.

Keratinocytes

The predominant cell type in the epidermis, the outermost layer of the skin, responsible for producing keratin, a protein that gives skin its strength and flexibility.

Sebaceous Glands

Small oil-producing glands located in the skin of mammals, involved in lubricating the skin and hair.