Privacy Laws Limit the Extent to Which Businesses Can Collect,use,or

question 56

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:

Perfect Competition

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect information.

Inelastic Demand

Demand that responds somewhat, but not a great deal, to changes in price. Inelastic demand always has a numerical value between zero and 1.

Zero Profits

A situation where a firm’s total revenues are exactly equal to its total costs, leading to no net profit or loss.

MC = ATC

This is the point where Marginal Cost equals Average Total Cost, typically illustrating the most efficient scale of production in the short run.