Asked by neeranjali kallydeen on Jun 14, 2024
Verified
What is caused by internalizing external costs?
A) It increases the chance for environmental degradation.
B) It omits the true costs of taxes.
C) It fails to include the full cost of pollution.
D) The market price approach becomes the true cost of an economic good.
Internalizing External Costs
The process of ensuring that the prices of goods and services fully reflect all the costs and benefits, including those impacts on the environment and human health that are not accounted for in the market price.
Environmental Degradation
The deterioration of the environment through depletion of resources such as air, water, and soil; the destruction of ecosystems; and the extinction of wildlife.
Market Price
The current value at which a commodity, security, or service can be bought or sold in a marketplace.
- Acquire insight into the costs related to economic activities both externally and internally, and their implications for sustainability and policy creation.
Verified Answer
SM
Shyrrl MurrellJun 16, 2024
Final Answer :
D
Explanation :
Internalizing external costs means including costs that are not typically accounted for in the market price of goods or services, such as environmental pollution. This process ensures that the market price reflects the true cost of production, including these previously external factors.
Learning Objectives
- Acquire insight into the costs related to economic activities both externally and internally, and their implications for sustainability and policy creation.