Internalising an Externality Means

question 30

Multiple Choice

Internalising an externality means

• A) the good becomes a public good.
• B) government regulations or taxes are sufficient to eliminate the externality completely.
• C) government imposes regulations that eliminate the externality completely.
• D) incentives are altered so that people take account of the external effects of their actions.

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Definitions:

Standardized Responses

Preset or uniform reactions or answers to specific stimuli or situations, often used to ensure consistency and efficiency.

Recurring Situations

Events or conditions that happen repeatedly over time in a predictable pattern or sequence.

Justice Criteria

Standards or principles used to assess fairness and equity within processes, decisions, and distributions in social and professional contexts.

Constituents

Individuals or groups represented by an elected official or a decision-maker.