Overfishing along the coastline of Helsking village led the government to impose a fee on the boats used for fishing. The fishermen were charged $50 on each boat they sent out for fishing. The following table shows the total pounds of fish caught per hour and the number of boats used for fishing.Table 13.2

-If the government is successful in internalizing the external costs of production in a market, then:

Question

Overfishing along the coastline of Helsking village led the government to impose a fee on the boats used for fishing. The fishermen were charged $50 on each boat they sent out for fishing. The following table shows the total pounds of fish caught per hour and the number of boats used for fishing.Table 13.2
 
-If the government is successful in internalizing the external costs of production in a market, then:

Quizplus · Accepted Answer

When the government internalizes the external costs of production, it means that the external costs are now included in the producer's cost calculations. As a result, the social costs (which include both private costs and external costs) will equal the private costs (now inclusive of what were previously external costs). This alignment ensures that the price of the product more accurately reflects its true cost to society, leading to a more efficient allocation of resources.

Overfishing Along the Coastline of Helsking Village Led the Government