Why Do We Define Behavior

question 26

Multiple Choice

Why do we define behavior?

• A) To determine what inner causes of behavior are
• B) So that we can study or change behavior
• C) To aid in decisions regarding research designs
• D) To understand the biology of an organism

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Definitions:

Externality

A consequence of an economic activity experienced by unrelated third parties; it can be either positive or negative.

External Costs

External costs, or negative externalities, are costs that are not borne by the parties directly involved in a transaction or activity but are imposed on third parties or society at large, such as pollution.

Internalized

This term generally refers to the absorption of external effects or costs by the decision-maker, often in the context of environmental economics.

Coase Theorem

An economic theory stating that if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property rights.