Often Parties Affected by an Externality Are Unable to Reach

question 42

Multiple Choice

Often parties affected by an externality are unable to reach a private solution due to negotiation and enforcement costs. These costs are known as

• A) transaction costs
• B) opportunity costs
• C) negative externalities
• D) transport costs

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Definitions:

Belief

An acceptance that something exists or is true, especially without proof.

Asians

People originating from or associated with the continent of Asia, which includes diverse cultures, languages, and ethnicities.

Prejudice

A preconceived opinion or judgment, often based on limited information or stereotypes.

Bias

A tendency to judge people before knowing them, basing the judgment only on their membership in some group or category of people.