Sometimes Analysts Think That an Externality Is Present in a Project,but

question 74

True/False

Sometimes analysts think that an externality is present in a project,but they recognize that the particular externality cannot be quantified with any precision-estimates of its effect would really just be guesses.In such a situation,the externality should be ignored,i.e.,not considered at all,because if it were considered,it would make the analysis appear more precise than it actually is.

---

Definitions:

Tradable Pollution Permits

An economic strategy aimed at reducing pollution through financial motivations designed to cut down on pollutant emissions.

Corrective Taxes

Taxes imposed to correct the effects of a market failure, often used to discourage harmful behaviors and internalize externalities.

Environmental Protection

The practice of safeguarding the environment by minimizing pollution, conserving natural resources, and promoting biodiversity through regulations and initiatives.

Pollution Permits

Licenses that allow the holder to emit a certain amount of pollution; these can be traded in a market to incentivize the reduction of overall pollution levels.