What Does the Phrase 'Internalising an External Cost' Mean

question 131

Multiple Choice

What does the phrase 'internalising 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:

Federation's Members

Entities that are part of a larger federal system, typically referring to the states or regions within a federal government structure.

Act Protects

Refers to laws or regulations designed to safeguard interests, such as consumer protection acts or environmental acts that prevent exploitation or harm.

Units of Input

The quantities of the various inputs used in the production of goods or services.

Units of Output

A measurement of production, quantifying the total goods or services produced by a company or industry.