Final answer:
In the nonmarket environment, institutions are formal or informal organizations that establish rules and practices for interaction, serving as arenas where interests can influence outcomes on issues.
Step-by-step explanation:
In the context of the nonmarket environment, institutions are formal or informal organizations that consist of a set of rules and practices that inform their members about their relationships with one another and how they should interact. This can include both governmental institutions such as legislatures, executives, and judiciaries, as well as nongovernmental entities like the news media, interest groups, and international actors. Among their various functions, institutions serve as arenas where interests seek to influence the outcomes on issues. Therefore, the answer to the question is 'a. Arenas in which interests seek to influence the outcomes on issues.'
These structures organize society and provide a framework for political behavior, as nothing occurs in politics without the engagement of individuals who form these institutions. They represent the organized social structures that not only function to organize society but can both create and challenge meaning for their members and the broader community. Additionally, they are key in providing collective action, mobilization of interest groups, and embodying the international relations between sovereign states.