When government makes it possible to push the costs of a good onto other people we get too much of the good.

Question

Quizplus · Accepted Answer

If the government allows or encourages individuals or businesses to externalize the costs of a good or service, meaning to pass on the negative impacts or expenses to others (such as the environment, future generations, or less privileged members of society), then there is less incentive for actors to internalize these costs or reduce their consumption. This can lead to an overproduction or overconsumption of the good, creating negative externalities that harm society as a whole.

When Government Makes It Possible to Push the Costs of a Good