An Externality Is Any Activity for Which an Individual Firm

question 29

Multiple Choice

An externality is any activity for which an individual firm or consumer does not take into account all

• A) of the ramifications of its actions on others.
• B) associated costs.
• C) associated benefits.
• D) associated costs and benefits.

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Definitions:

Conformity

The act of aligning one's attitudes, beliefs, or behaviors to match those of a group or social standard, often due to perceived pressure.

Door-in-the-Face Technique

A persuasion strategy where an initially large request is made knowing it will be refused so that a smaller, more moderate request will seem reasonable by comparison.

Temporoparietal Junction

A region of the brain where the temporal and parietal lobes meet, involved in processing social information and theory of mind.

Occipital-Parietal

Referring to the occipital and parietal lobes of the brain, areas involved in processing visual and spatial information.