What does the phrase internalizing an external cost mean?
A) forcing producers to factor into their production costs the cost of the externalities created in the production of their output
B) finding a way to address cross-border pollution
C) limiting the extent to which domestic firms can outsource production
D) prohibiting economic activities that create externalities
Question 2
Refer to Table 2-10. Which of the following statements is true?
A) Barney has a comparative advantage in making unicycles and Fred in making pogo sticks.
B) Barney has a comparative advantage in making pogo sticks and Fred in making unicycles.
C) Barney has a comparative advantage in making both products.
D) Fred has a comparative advantage in making both products.
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