Economists Generally Prefer Greater Effort Made to Force Internalization of Externalities

question 221

True/False

Economists generally prefer greater effort made to force internalization of externalities through taxes rather than using alternative approaches, such as establishing pollution standards.

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Definitions:

AFC

Average Fixed Cost, the fixed cost per unit of output, calculated by dividing total fixed costs by the quantity produced.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the total quantity of output produced.

Average Fixed Cost

The fixed cost per unit produced, calculated by dividing total fixed costs by the quantity of output produced.

Marginal Cost

The charge for generating one more unit of a good or service.