An Externality Can Best Be Defined as

question 289

Multiple Choice

An externality can best be defined as

• A) a party not directly involved in a transaction.
• B) a consequence of a transaction that spills over to affect third parties.
• C) a right of an owner to use and exchange property.
• D) a cost associated with the production of one more unit of output.

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Definitions:

Imaginary Audience

A psychological concept where an individual believes that his or her actions are the center of others' attention, common in adolescence.

Metacognition

The awareness and understanding of one's own thought processes, often leading to better learning strategies and problem-solving skills.

Hypothetical-Deductive Reasoning

A cognitive process involving forming hypotheses based on observations and then logically deducing the consequences to test these hypotheses.

Moral Orientation

An individual's inherent or learned disposition towards understanding, interpreting, and acting upon moral issues.