The Law of __________ Says That If Someone Does Something

question 94

Multiple Choice

The law of __________ says that if someone does something for someone else it will invoke a sense of obligation to return the favor.

• A) favors
• B) obligations
• C) reciprocity
• D) exchange
• E) tradeoffs

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Definitions:

Allocative Efficiency

Occurs when resources are distributed in a way that maximizes the net benefit to society.

Consumer Surplus

The difference between the maximum price a consumer is (or consumers are) willing to pay for an additional unit of a product and its market price; the triangular area below the demand curve and above the market price.

Net Benefit

Net benefit refers to the total positive effects or advantages of a decision or action, minus any costs or negative effects associated with it.

Creative Destruction

A process where new innovations cause the demise of older industries or technologies, leading to economic growth and development.