If a Negative Externality Is to Be Internalized to the Decision

question 71

Multiple Choice

If a negative externality is to be internalized to the decision maker, the:

• A) producers' marginal costs should be increased by an amount equal to the marginal cost to those outside the trade that results from production of the good.
• B) producers' marginal costs should be reduced by an amount equal to the marginal cost to those outside the trade that results from production of the good.
• C) consumer of the good should receive a subsidy equal to the marginal cost to those outside the trade that results from production of the good.
• D) consumer of the good should pay a tax equal to the marginal benefit to those outside the trade that results from consuming the good.

---

Definitions:

Family Support

Assistance and encouragement provided by family members to each other, especially during difficult times or health challenges.

School-age Child

A child who is in the age range of attending primary or elementary school, approximately 5 to 12 years old.

Reaction To Death

The emotional, physical, and psychological responses individuals exhibit in response to the death of someone close.

Funerals and Burials

Ceremonies and rituals associated with the interment of the dead, often involving customs specific to cultural or religious practices.