Internalizing a negative externality means _____
a. changing the incentives of consumers to ignore the externality
b. changing the incentives of producers to act as if there were no market for the external cost
c. changing the incentives of producers to act as if there were a market for the external cost
d. changing the incentives of consumers to complain about the externality to the producers
c
You might also like to view...
Classical macroeconomic theory was discredited and gave way to the first Keynesian approach as a result of
A) the collapse of the gold standard at the outset of World War I. B) the Great Depression of the 1930s. C) the wage-price controls of World War II. D) the rapid inflation of the late 1960s. E) the switch from fixed to flexible exchange rates in the early 1970s.
Individuals will make choices to maximize their:
A. constraints. B. utility. C. income. D. values.
If there is a permanent increase of 5% in the domestic money supply, then which of the following will be true in the long run?
a. Prices will decrease by 5%. b. Prices will increase by 4%. c. The home country currency will depreciate by 5%. d. The home country currency will appreciate by 4%.
Increases in government spending or tax cuts normally push interest rates up.
Answer the following statement true (T) or false (F)