If Two Parties Negotiating a Private Solution to an Externality

question 16

Multiple Choice

If two parties negotiating a private solution to an externality cost employ a lawyer to help draft the contract, the lawyer's costs are a type of:

• A)transport cost
• B)legal cost
• C)negative consumption externality
• D)a transaction cost

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Definitions:

Strain Reactions

Physical or emotional responses to stress or pressure, which can affect an individual's well-being and performance.

Stressful Events

Incidents or situations that trigger psychological stress responses in individuals.

Psychophysiology

The branch of psychology that studies the relationship between physiological processes and behavior.

Stress Response

The physical, mental, and emotional reactions or adjustments made as a response to perceived threats or challenges.