Which of the following statements is false?
A. A positive externality is internalized if the person that generated the externality incorporates into his or her own private cost-benefit calculations the external benefits that third parties receive.
B. Internalizing externalities is not the same as adjusting for externalities.
C. An externality has been completely internalized if the socially optimal output emerges.
D. Assigning property rights is one way to internalize externalities.
Answer: B
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Suppose a firm's total revenue is $1,000,000. The firm has incurred explicit costs of $750,000
There is also $50,000 of forgone wages by the owner, $10,000 of forgone interest by the owner, $3,000 worth of economic depreciation, and $20,000 worth of normal profit. What is the firm's economic profit? A) $250,000 B) $200,000 C) $190,000 D) $167,000 E) $180,000
Refer to the table below. A technological advance lowers production costs such that the quantity supplied increases by 60 units of this product at each price. As a result of this technological change, equilibrium output in this market:
A. Decreased by 60 units
B. Increased by 60 units
C. Increased by 30 units
D. Decreased by 30 units