Why don't people take into consideration the external costs of their actions and reduce the amount of externalities?
What will be an ideal response?
People have no incentive to take into consideration the external costs of their actions. Since their utility or income would be lower if they bore all the costs associated with their activities, most people will not do so voluntarily.
Economics
You might also like to view...
If workers who make DVDs get a pay raise, the equilibrium price of a DVD ________ and the equilibrium quantity of DVDs ________
A) rises; increases B) rises; decreases C) falls; decreases D) falls; increases
Economics
Which of the following components of GDP accounts for the bulk of national expenditures in the United States?
a. Government purchases b. Imports c. Consumption d. Investment e. Exports
Economics