An Externality Is Said to Be Internalized

question 76

Multiple Choice

An externality is said to be internalized:

• A)when individuals take external costs and benefits into account in their decision making.
• B)when the Coase theorem is irrelevant or cannot be applied.
• C)when individuals successfully petition the government to ban or restrict activities that generate negative externalities.
• D)when individuals learn to adapt to negative externalities through introspection or internal acceptance of what are viewed as unchangeable facts of life.

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Definitions:

Credit Balance

The amount of money in a financial account that the account holder can claim, representing a surplus of payments over charges.

Pegboard System

An organizational tool consisting of a board with holes into which pegs are placed to hang tools, keys, or other items, often used in retail or workshop settings.

Daily Entries

Regular, often daily, written records or notations of events, transactions, observations or personal reflections.

Financial Record

A financial record is documentation of financial transactions and positions of an individual or organization, essential for financial management and accountability.