A Negative Externality Can Be Internalized by

question 65

Multiple Choice

A negative externality can be internalized by

• A)persuasion.
• B)the imposition of a tax.
• C)the assignment of property rights.
• D)a voluntary agreement.
• E)all of the above

---

Definitions:

Fixed Manufacturing Overhead

Costs related to the production process that remain constant regardless of the production volume, such as rent and salaries of managers.

Selling and Administrative Expense

The aggregated total of all expenses associated with selling a company's products and services, as well as managing the day-to-day operations.

Variable Expense

Costs that vary in direct proportion to changes in levels of activity or production volume.

Fixed Expense

Fixed expense refers to costs that do not fluctuate with changes in production level or sales volume.