Privacy Laws Limit the Extent to Which Businesses Can Collect

question 16

Multiple Choice

Privacy laws limit the extent to which businesses can collect, use, or disclose personal information about their customers.Which of the following strategies should be adopted by a company to minimize the risks and costs associated with privacy compliance?

• A)A company should appoint one person to be responsible for privacy issues so that it can completely avoid the cost of training other employees about privacy compliance.
• B)When a company only collects necessary personal information, it can use that information however it wants.
• C)A company should encrypt personal information whenever possible, even if there is a small financial cost to do so.
• D)If the company is located in the Yukon, it is not subject to privacy legislation so should develop its privacy policy in a way that best suits its needs.
• E)A company should include the maximum expected cost of privacy law claims into its calculation price of goods or services and not bother to comply with the privacy laws.

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Definitions:

Specialize

The process of focusing efforts and resources on a narrow area of expertise to increase efficiency and proficiency.

Comparative Advantage

The ability of an individual, firm, or country to produce a good or service at a lower opportunity cost than competitors.

Benefit From Trade

The advantage gained by countries, entities, or individuals from engaging in international trade, often including access to a wider variety of goods and services.

Absolute Advantage

The ability of an entity to produce a good or service more efficiently than its competitors using the same amount of resources.