The Term Externalities Refers To

question 101

Multiple Choice

The term externalities refers to:

• A) The inequitable distribution of output.
• B) All costs and benefits of a market activity borne by a third party.
• C) The impact that imported goods have on domestic markets.
• D) Free-riders who benefit but do not pay.

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Definitions:

Insurance Company

A financial institution that provides a range of insurance policies to protect individuals and businesses against risk.

Initial Offer

The first proposal or bid made during negotiations.

Government

The organized system of institutions, policies, and laws through which a community or country is ruled and administered.

Express Term

A provision in a contract that is clearly articulated and agreed upon by all parties, either orally or in writing.