In book and documentary, The Corporation, much was made of "externalities." What does this term mean?Group of answer choicesCharitable giving by corporate executives.Effects arising from the production process, the costs of which are passed to a third party.The draining effects on profits by external actors, such as labor unions.The organization of capitalist production exclusively outside of the United States.
Question
In book and documentary, The Corporation, much was made of "externalities." What does this term mean?Group of answer choicesCharitable giving by corporate executives.Effects arising from the production process, the costs of which are passed to a third party.The draining effects on profits by external actors, such as labor unions.The organization of capitalist production exclusively outside of the United States.
Solution
The term "externalities" refers to the effects arising from the production process, the costs of which are passed to a third party. This can include both negative externalities, such as pollution, and positive externalities, such as the benefits of a well-educated workforce. In the context of The Corporation, the term is used to critique how corporations often externalize their costs onto society, while privatizing profits.
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Externality: What It Means in Economics
Define external growth of firms
Which of the following is true of a negative externality?Group of answer choicesThe government can use subsidies to encourage firms to internalize the externality.The government must take over the production of this good so that the externality can be internalized.Some benefits accrue to a third party.Its existence always requires corrective measures by the government.Some costs are borne by a third party.
If companies who internalised an externality want to supply less at any given price compared to the original market supply, it must be a:Question 2Select one:A.Social externality.B.Positive externality. C.Negative externality.D.Network externality.
Externalities are minimized ifGroup of answer choicesthe government owns all of the productive resources.there are no private goods.private property rights are well established.there are no public goods.there are no free-riders.
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