If a person who generates a negative externality incorporates into his or her private cost-benefit calculations the effects that this externality will have on third parties, the externality has been
A. substituted.
B. accommodated.
C. compounded.
D. internalized.
Answer: D
You might also like to view...
The percentage of money income earned by the lowest fifth of families in the U.S. was ________ in 1960 and ________ in 2010
A) 41.3%; 47.8% B) 15.9%; 20.0% C) 12.2%; 9.5% D) 4.8%; 3.8%
When the consumer is at his or her best affordable consumption point, it is the case that the marginal rate of substitution is
A) greater than the price ratio. B) equal to the price ratio. C) less than the price ratio. D) maximized.
The view that decision-maker expectations are based on actual outcomes observed during the recent past is called the:
a. rational expectations hypothesis. b. adaptive expectations hypothesis. c. permanent income theory. d. recognition lag.
The recipe that defines the maximum amount of output that can be produced with K units of capital and L units of labor is the:
A. production function. B. research and development schedule. C. technological constraint. D. total product.