The Presence of Negative Externalities That Are Incorporated in Price

question 109

True/False

The presence of negative externalities that are incorporated in price, results in misallocation of resources.

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Definitions:

Acknowledged Damages

Damages that have been recognized and confirmed by the parties involved in a dispute or by a legal authority.

Consideration

A fundamental requirement for the formation of a legally binding contract, involving an exchange of something of value between the parties.

Promisor

An individual or entity that makes a promise or commitment in a contract to perform some specified action in the future.

Promisee

The person to whom a promise is made in a contract, to whom the promisor has an obligation.