Transaction Costs

question 203

Multiple Choice

Transaction costs

• A)can keep private parties from solving externality problems.
• B)are incurred in the production process due to externalities.
• C)increase when taxes are imposed to correct negative externalities.
• D)are eliminated when the government intervenes in a market with externalities.

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Definitions:

Dram Shop Statutes

Laws that hold alcohol-serving establishments liable for serving alcohol to visibly intoxicated persons or minors who subsequently cause harm.

Emergency Services

Public or private organizations that provide assistance and protect the public during emergencies, such as fire, medical, and law enforcement services.

Negligence

A failure to behave with the level of care that someone of ordinary prudence would have exercised under the same circumstances, resulting in unintended harm to another party.

Tort Law

A section of law that deals with civil wrongs, providing remedies for individuals harmed by the wrongful actions of others.