An economic agent ________ when he accounts for the full costs and benefits of his actions.
A) is called a free rider
B) internalizes an externality
C) maximizes his profit
D) is called a rent seeker

Question

Quizplus · Accepted Answer

Internalizing an externality means that an economic agent takes into account the full costs and benefits of their actions, including any external costs or benefits that may affect others. This leads to more efficient outcomes and avoids the negative consequences of externalities. Free riding refers to individuals who benefit from a public good without contributing to its provision, maximizing profit refers to the goal of businesses, and rent seeking refers to individuals or groups seeking to gain economic benefits through political influence rather than productive activity.

An Economic Agent ________ When He Accounts for the Full