Social Capital Has Downsides

question 33

Multiple Choice

Social capital has downsides.Which of the following is a downside?

• A) High social capital may breed groupthink, that is, a tendency to question shared beliefs.
• B) Socialization processes is inexpensive.
• C) Individuals may become more willing to collaborate on joint projects.
• D) Social capital may both breed groupthink and the socialization processes to create it (orientation, training, etc.) can be expensive.

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Definitions:

Marginal External Cost

The cost of producing one additional unit of a good or service that is borne by people other than the producer, often not reflected in the product's market price.

Socially Optimal

A state or outcome in which resource allocation maximizes social welfare, considering all costs and benefits to society.

Market Price

The current price at which an asset or service can be bought or sold, determined by supply and demand.

Emissions Standard

Legal limit on the amount of pollutants that a firm can emit.