The Business Activities of Firm a Confer Positive Externalities on Firm

question 378

Multiple Choice

The business activities of Firm A confer positive externalities on Firm B, and the business activities of Firm B confer positive externalities on Firm A. If the two firms merged, then

• A)their respective markets would move closer to the social optimum.
• B)their respective markets would move further away from the social optimum.
• C)total surplus in their respective markets would decrease.
• D)the merger would serve as an example of a misguided public policy toward externalities.

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Definitions:

Anti-Social Behaviour

Actions that harm or lack consideration for the well-being of others, often violating social norms and laws.

Biological Perspective

An approach in psychology that examines behaviors, emotions, and thoughts through the lens of biological processes, such as genetics and neurochemistry.

Deviant Learning Environment

A situation or context where individuals learn to engage in behavior that deviates from the socially accepted norm.

Differential Association

A theory in criminology suggesting that individuals learn deviant behavior from those close to them who provide models of and opportunities for deviance.