If firms are forced to internalize their external costs, who will pay the resulting higher price for the firm's products?Group of answer choicesnobody - when costs are internalized they no longer existthe purchaser of the productsthe governmenteverybody who bears the external costs

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.

When there is an externality in a market,Group of answer choicesthe externality will move the market to an economically efficient equilibrium.the externality will cause the market price to be less than or greater than the equilibrium price.the government should use price controls to enable the market to reach equilibrium.government intervention may increase economic efficiency.

When the government imposes a tax on a firm that generates external costs, the tax is

When is a firm more likely to outsource a particular activity that it otherwise would conduct itself?Group of answer choicesThe particular activity is the most important aspect of the final product.The value generated by the conduct of the activity is minimal in comparison to the total value of the final product.There are very few external agents that can carry out that particular activity.There are many external agents that could perform the activity at the same cost.