Why Do Decision Makers Tend to Ignore External Costs? How

question 44

Essay

Why do decision makers tend to ignore external costs? How can internalizing external costs move us closer to efficient levels of output?

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Definitions:

Antagonists

Substances that bind to receptors in the body and block or dampen the effects of agonists, often used in pharmaceuticals to inhibit certain actions within the body.

Cleanup Enzyme

A type of enzyme that breaks down and removes unwanted or damaged molecules within a cell, helping to maintain cellular health and function.

Norepinephrine

A neurotransmitter and hormone involved in the body's response to stress; it plays roles in alertness, arousal, and the regulation of blood pressure.

Hormone

A chemical released by a gland. Hormones travel through the bloodstream and influence functions such as metabolic rate, arousal level, and the liver’s sugar output.