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The Tendency for People to Perceive Ambiguous Actions by Others

question 65

Multiple Choice

The tendency for people to perceive ambiguous actions by others as evidence of hostility is known as the ____.


Definitions:

Coase Theorem

The Coase Theorem postulates that if property rights are well-defined and transaction costs are low, parties will negotiate privately to correct externalities and allocate resources efficiently.

Externalities

Externalities are unintended side effects of economic activity affecting third parties not directly involved in the transaction, which can be either positive or negative.

Pollution Permits

Legal rights granted by governments to emit a specific amount of pollutants into the environment.

Corrective Tax

A tax designed to incentivize socially desirable behavior, often used to correct for the negative externalities of an action or consumption.

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