In Some Situations, Private Economic Actors Cannot Solve the Problem

question 19

Short Answer

In some situations, private economic actors cannot solve the problem of externalities among themselves because of substantial _________ costs.

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Definitions:

Oil Imports

The purchase of petroleum from foreign countries, essential for economies that consume more oil than they produce domestically.

Comparative Advantage

is the economic theory that a country should specialize in producing and exporting goods and services for which it has the lowest opportunity cost.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.

Marginal Costs

The additional cost incurred when producing one more unit of a particular good or service.