Many Remedies to Resolving Externalities Involve "Internalizing the Externality

question 168

Multiple Choice

Many remedies to resolving externalities involve "internalizing the externality." Which BEST approximates that goal?

• A) placing a large dome over a polluting factory
• B) punching people who smell nice
• C) giving candy to disruptive children
• D) buying yourself flowers to counteract the bad smell from a neighboring pig farm

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Definitions:

Artistic Works

Original items or creations, like paintings, music, literature, etc., often protected by copyright law.

Capital Assets

Long-term assets such as property, plant, and equipment that are used or held for investment purposes, the sale of which results in capital gains or losses.

Gift

Something voluntarily transferred by one person to another without compensation.

Short-term Capital Loss

A loss realized from the sale or exchange of a capital asset held for one year or less.