A Market Transaction Causes an Externality If Someone

question 183

Multiple Choice

A market transaction causes an externality if someone

• A) directly involved in the transaction receives uncompensated benefits or costs from it.
• B) not directly involved in the transaction receives uncompensated benefits or costs from it.
• C) directly involved in the transaction seeks legal assistance to ensure that the transaction is carried out.
• D) not directly involved in the transaction interferes in it by imposing regulations or product standards.

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Definitions:

Subjective Concept

An idea or notion based on personal opinions, interpretations, points of view, emotions, and judgment.

Objective Concept

An idea or notion that is based on factual and observable phenomena, unbiased by personal feelings or interpretations.

Personal Preferences

The specific likes, dislikes, desires, and interests of an individual, often influencing their purchasing decisions.

Scarcity

The core issue in economics is the presence of endless human desires within a finite resource environment.