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

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Definitions:

Control Group

In an experiment, the group of subjects not exposed to the treatment or intervention, used as a benchmark to measure the effect of the treatment.

Correlation

Correlation is a statistical measure that indicates the extent to which two or more variables fluctuate together.

Observational Studies

Research methods where the investigator observes subjects without manipulation, aiming to find correlations between variables.

Planetary Motion

The movement of planets around a star, such as the orbit of Earth and other planets around the Sun.