Which of the Following Statements Is TRUE About the Relationship

question 287

Multiple Choice

Which of the following statements is TRUE about the relationship among external, internal and social costs?

• A) Social costs will always be higher than external costs.
• B) Social costs will always be lower than internal costs.
• C) Internal costs will always be higher than external costs.
• D) Internal costs will never equal external costs.

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Definitions:

Compensatory Decision-making

A decision-making process where individuals make choices by weighing the pros and cons of different options to compensate for weaker attributes by stronger ones.

Functional Fixedness

A cognitive bias that limits a person to use an object only in the way it is traditionally used, ignoring other possible uses.

Noncompensatory Modeling

A decision-making process where options are evaluated based on whether they meet predetermined criteria, without considering trade-offs between characteristics.

Insight

A sudden understanding or realization of a problem's solution, often coming unexpectedly after a period of contemplation or seeming like a spontaneous revelation.