When Externalities Exist, Buyers and Sellers

question 49

Multiple Choice

When externalities exist, buyers and sellers

• A)neglect the external effects of their actions, but the market equilibrium is still efficient.
• B)do not neglect the external effects of their actions, and the market equilibrium is efficient.
• C)neglect the external effects of their actions, and the market equilibrium is not efficient.
• D)do not neglect the external effects of their actions, and the market equilibrium is not efficient.

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Definitions:

Uncertainty Avoidance

A cultural dimension that describes the extent to which a society tolerates ambiguity and uncertainty, favoring clear rules and stability.

Individualism-Collectivism

A dimension of cultural variation that reflects the degree to which a society emphasizes individual goals and self-expression versus group goals and interdependence.

Masculinity-Femininity

A dimension of culture that reflects the distribution of emotional roles between the genders; it contrasts competitiveness versus care and quality of life.

Power Distance

The degree to which a society accepts unequal distribution of power.