An Externality Is Internalized If

question 32

Multiple Choice

An externality is internalized if

• A)the person(s) or group that generated the externality incorporate into their own private cost-benefit calculations the external benefits (in the case of a positive externality) or the external costs (in the case of a negative externality) that third parties bear.
• B)people are made aware of it and realize that social benefits are less than private benefits (in the case of a positive externality) and that social costs are less than private costs (in the case of a negative externality).
• C)the person(s) or group that generated the externality do not incorporate into their own private cost-benefit calculations the external benefits (in the case of a positive externality) or the external costs (in the case of a negative externality) that third parties bear.
• D)b and c
• E)none of the above

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Buyer Adversary

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Problem-Solution Approach

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