When Choosing a State in Which to Locate, One Must

question 103

Multiple Choice

When choosing a state in which to locate, one must evaluate which of the following?

• A)The general business climate
• B)The state's business laws, regulations, and taxes
• C)Tax incentives and/or investment credits
• D)All of the above

---

Definitions:

Externalities

Costs or benefits arising from an economic activity that affect third parties who did not choose to incur that cost or benefit.

Socially Optimal

A condition where resources are allocated in the most efficient way from the society's point of view, maximizing overall welfare.

Common Resource

A resource like air or water that is not owned by anyone, can be used by everyone, and is difficult to exclude others from using.

Artificially Scarce Good

A product or service whose supply is intentionally restricted to increase its price or value, often contrary to its natural abundance.