Asked by Casual Commentator on May 13, 2024
Verified
Externalities may be internalized by
A) government-imposed taxes and subsidies.
B) regulation.
C) legal rules and procedures.
D) bargaining and negotiation.
E) All of the choices are correct.
Government-Imposed Taxes
Levies authorized by the government on individuals, corporations, and goods.
Internalized
The process of incorporating or taking within oneself, often used in economics to describe the absorption of external costs or benefits by an entity.
Negotiation
The process by which two or more parties communicate and ideally reach an agreement or compromise on a matter of mutual interest.
- Gain insight into the fundamentals of market failures, which include externalities and inefficiencies.
- Acknowledge the impact of externalities on social welfare and methods to internalize them.
Verified Answer
SS
Shaketa ShountaeMay 15, 2024
Final Answer :
E
Explanation :
All of the choices are correct. Externalities can be internalized by government-imposed taxes and subsidies, regulation, legal rules and procedures, and bargaining and negotiation. Each of these approaches aims to either decrease the negative externalities or increase the positive ones, in order to align private costs and benefits with social costs and benefits. The best approach may vary depending on the specific situation and the parties involved.
Learning Objectives
- Gain insight into the fundamentals of market failures, which include externalities and inefficiencies.
- Acknowledge the impact of externalities on social welfare and methods to internalize them.