Externalities Can Be Internalized Through Voluntary Agreements as Long as

question 165

Multiple Choice

Externalities can be internalized through voluntary agreements as long as

• A)transaction costs are low relative to expected benefits.
• B)transaction costs are high relative to expected benefits.
• C)the agreement is a short-run agreement.
• D)the agreement is a long-run agreement.

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Definitions:

Earth's Ecosystems

The complex networks of living organisms and their physical environment present on Earth, interacting as a system and including both natural and human-modified ecosystems.

Wilderness Areas

Natural environments on Earth that have not been significantly modified by human activity, designated for conservation and as habitats for numerous species.

Biological Diversity

The encompassing term for the variety among living organisms from all sources, including terrestrial, marine, and other aquatic ecosystems.

Sustainable Timber

Timber harvested in a way that maintains the long-term health and biodiversity of the forest, ensuring a continuous supply of wood.