Altering Incentives So That People Take Account of the External

question 282

Multiple Choice

Altering incentives so that people take account of the external effects of their actions

• A)is called internalizing the externality.
• B)can be done by imposing a corrective tax.
• C)is the role of government in markets with externalities.
• D)All of the above are correct.

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Definitions:

Self-Fulfilling Prophecy

An expectation that comes true because of the tendency of the person holding it to act in ways that bring it about.

Self-Efficacy

The belief in one's capabilities to organize and execute the courses of action required to manage prospective situations.

Mastery Goal

An objective focused on developing competence or mastering a skill rather than comparing oneself to others.

Approach Goal

A goal that an individual is actively working towards, often characterized by the pursuit of positive outcomes or experiences.