What Does the Phrase "Internalizing an External Cost" Mean

question 253

Multiple Choice

What does the phrase "internalizing an external cost" mean?

• A)limiting the extent to which domestic firms can outsource production
• B)prohibiting economic activities that create externalities
• C)forcing producers to factor into their production costs the cost of the externalities created in the production of their output
• D)finding a way to address cross-border pollution

---

Definitions:

Capital Balances

Refer to the cumulative amounts of money or value that partners or shareholders have contributed to a company, inclusive of earnings and minus any losses.

Profits and Losses

A financial statement that summarizes the revenues, costs, and expenses incurred during a specific period.

Billable Hours

The amount of an employee's work time that can be charged to a client, as in the context of professional services like legal advice or consultancy.

Capital Balance

Refers to the amount of money that a company's shareholders have invested in it.