The Existence of Externalities Is

question 77

Multiple Choice

The existence of externalities is

• A) impossible in a market system.
• B) an argument to keep government from becoming involved in the allocation of resources.
• C) a situation where some costs or benefits of an activity affect people who had no influence over the decision to carry out that activity.
• D) a result of international trade.
• E) always harmful.

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Definitions:

Advertising Wearout

The phenomenon where an advertisement loses its effectiveness due to repeated exposure over time, leading to audience boredom and a decline in response rates.

Advertising Burnout

A situation where consumers become indifferent to advertising messages after being exposed to excessive amounts of advertising.

Sleeping Effect

A phenomenon where the persuasiveness of a message increases with time after it has been initially discounted or forgotten.

CS Decreasing

A process where customer satisfaction levels decline over time due to various factors such as poor service quality or unmet expectations.