Why Are Negative Externalities Difficult to Internalize in Practice

question 10

Multiple Choice

Why are negative externalities difficult to internalize in practice?

• A) because the cost of cleaning up the effects of pollution is overstated
• B) because the marginal cost of socially owned resources is zero
• C) because no markets exist to measure the cost of the externality
• D) because the deadweight loss is subjective in nature

---

Definitions:

Nicotine Patch

A transdermal patch that releases nicotine into the body through the skin, used as an aid to help quit smoking by reducing withdrawal symptoms.

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration. It is naturally present in air and is absorbed by plants in photosynthesis.

Stimulus For Breathing

Factors that trigger the respiratory center in the brain, causing inhalation and exhalation, such as increased carbon dioxide levels in the blood.

Respiratory Distress Syndrome

A medical condition often seen in premature infants, characterized by difficulty breathing due to underdeveloped lungs.