Which Statement BEST Describes a Negative Externality

question 117

Multiple Choice

Which statement BEST describes a negative externality?

• A)Your neighbor loves to bake bread and always brings you a loaf fresh and hot from the oven.
• B)Your neighbor has an ornamental pond that breeds mosquitoes.
• C)Your neighbor has invested in beautiful landscaping,increasing the value of all of the houses on the block.
• D)Your neighbor has a pool and has given you an open invitation to come over and swim.

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Definitions:

Tariff

A levy placed by a government on goods that are brought into or sent out of a country.

Consumer Surplus

Consumer surplus is the difference between the total amount that consumers are willing and able to pay for a good or service and the total amount they actually pay.

Specific Tariff

A type of tax levied on imports that is based on a specific amount of money per unit of the good imported, rather than on its value.

World Price

The global market price of a product, influenced by worldwide conditions of supply and demand.