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Simon Cinema wants to know what the audience thought of tonight's advanced screening of a heralded psychological thriller called "I Can't Sleep." He and his research assistants stand outside the theatre exit and ask every fifth person leaving the theatre to answer several questions about their impression of the movie.Simon is using:
Externalities
Economic side effects or consequences that affect uninvolved third parties; can be positive or negative.
Diminishing Utility
A principle in economics that as consumption of a good or service increases, the marginal utility derived from each additional unit decreases.
Fed
Short for the Federal Reserve, which is the central banking system of the United States, responsible for monetary policy.
Externalities
Costs or benefits that affect parties who did not choose to incur that cost or benefit, often leading to market failure if unaddressed.
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