The Optimal Quantity of a Negative Externality Is Zero If

question 153

Multiple Choice

The optimal quantity of a negative externality is zero if:

• A)it imposes a high enough cost on society.
• B)it is costly for people to negotiate with each other.
• C)the majority of voters decide to eliminate the externality.
• D)the marginal cost of reducing the externality is zero.

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Definitions:

Autonomy

The degree of independence and self-direction that an individual or entity has to make decisions and take actions.

Flextime

An arrangement that allows employees to choose their working hours within agreed limits, promoting work-life balance.

Compressed Workweek

A work schedule that allows employees to work their full hours over fewer days, such as four ten-hour days, leading to longer weekends and potential cost savings.

Mutual Trust

A reciprocal belief between parties that each will act with honesty, integrity, and reliability.