The personal decisions of consumers and firms are based on ________ cost(s).

Question

Quizplus · Accepted Answer

The personal decisions of consumers and firms are based on internal cost(s), which refer to the costs incurred by the individual or the firm themselves while making a decision. External costs refer to costs incurred by individuals or firms not directly involved in the transaction or decision, such as pollution or crime. Social costs refer to costs incurred by society as a whole, such as loss of biodiversity or depletion of natural resources. Third-party costs refer to costs borne by individuals or firms that are not directly involved in the transaction, but are affected by its outcome, such as the family members of a smoker or a victim of pollution. Public-good costs refer to costs incurred in the provision of public goods, such as national defense or public health.

The Personal Decisions of Consumers and Firms Are Based on ________