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What Is Meant by the Term "Internalizing an Externality"? How

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Essay

What is meant by the term "internalizing an externality"? How does a Pigovian tax or subsidy internalize an externality?


Definitions:

Anorexia

An eating disorder characterized by an obsessive fear of gaining weight, leading to severe restriction of food intake and malnourishment.

Academically Successful

Refers to achieving high marks and exceeding average standards in an educational setting.

Primary Drives

Basic biological needs such as thirst or hunger that motivate behavior to satisfy those needs.

Physiologically Based

Pertains to the underlying physiological or biological mechanisms of an organism or process.

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