Altering incentives so that people take account of the external effects of their actionsa. is called internalizing the externali

Question

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Altering incentives so that people take account of the external effects of their actionsa. is called internalizing the externali

ty.b. can be done by imposing a corrective tax.c. is the role of government in markets with externalities.d. All of the above are correct.

Social Studies

1 answer:

disa [49] · Answer 1 · 2022-05-25T19:05:39+03:00

Answer:

Altering incentives so that people take account of the external effects of their action is d. All of the above are correct.

Explanation:

Internalizing the externality means shifting the burden, or costs, from a negative externality, such as pollution or traffic congestion, from outside to inside (external to internal). This can be done through taxes, property rights, tolls, and government subsidies.