Suppose That You Had a Computer Program That Could Morph

question 26

Multiple Choice

Suppose that you had a computer program that could morph images of different faces into composite "average faces." If you began with four faces, combined them in pairs to make two new faces, and then combined them again to make a final, single composite face, which would, on average, be MOST attractive?

• A) The four original faces
• B) The pair of composite faces
• C) The final single composite face
• D) It is impossible to say

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Definitions:

Externalities

Economic impacts on bystanders not directly engaged, with potential for both positive and negative outcomes.

Transaction Costs

The expenses incurred when buying or selling goods and services, which can include fees, commissions, and the costs of the time and effort involved in making the transaction.

Coase Theorem

A principle stating that if trade in an externality is possible and there are no transaction costs, bargaining will lead to an efficient outcome regardless of the initial allocation of property rights.

Externalities

Monetary consequences or side effects that touch upon third parties not directly engaged, with potential for both positive or negative outcomes.