One Difficulty in Using Voluntary Transactions to Internalize Externalities Is

question 262

Multiple Choice

One difficulty in using voluntary transactions to internalize externalities is that

• A) people are motivated by self-interest and are often unwilling to engage in a transaction that might make another person better off.
• B) the government usually will not enforce contracts of this type.
• C) transaction costs of coming to an agreement can be very large when numerous people are involved.
• D) people usually don't understand what the real opportunity costs are that they face.

Understand the key factors that influence intelligence, including genetic and environmental factors.

Comprehend the concept of reaction range and how it relates to intelligence.

Recognize the implications of adoption studies on understanding intelligence.

Understand the significance and implications of the Flynn effect on intelligence over time.

---

Definitions:

Imaginary Audience

The belief often held by adolescents that they are constantly being observed and judged by others, as if they are the center of attention in a crowd.

Self-Conscious

The state of being overly aware of oneself, one’s appearance, or one’s actions, often leading to feelings of awkwardness or anxiety.

Lawrence Kohlberg

An American psychologist renowned for his theory of moral development, which proposes that individuals progress through stages of moral reasoning as they mature.

Preconventional

The first level in Kohlberg's stages of moral development, where moral reasoning is based primarily on external consequences and individual needs.