When the Costs of an Action Are Not Fully Borne

question 121

Multiple Choice

When the costs of an action are not fully borne by the two parties engaged in a transaction, this is called a(n)

• A) externality.
• B) equilibrium.
• C) property right.
• D) internal cost.

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Definitions:

Arbitration

A process where a neutral third party makes a binding decision to resolve a dispute, without going to court.

Neutral Third Party

An impartial entity involved in conflict resolution or negotiation processes, who has no stake in the outcome and is unbiased.

Union Security

Agreements or practices that ensure the financial and membership stability of labor unions, typically involving arrangements like union shops or agency shops in workplace policies.

Compulsory Membership

A requirement for individuals to join a particular organization or group, often seen in unions or professional associations.