An Externality Is Said to Exist When

question 33

Multiple Choice

An externality is said to exist when:

• A)individuals impose costs or benefits on others but have no incentive to take these costs and benefits into account.
• B)individuals impose costs or benefits on others,and the market provides incentives to take these costs and benefits into account.
• C)individual actions are affected by external forces like the loss of U.S.jobs because of competition from abroad.
• D)individual actions are affected by government policies (such as taxes)that are externally imposed on the market.

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Definitions:

Biodiversity Hotspot

Geographic regions that are rich in species diversity, including many endemic species, and are under significant threat from human activities.

Ex Situ Conservation

The practice of conserving animals, plants, or their genetic material outside their natural habitat, as in zoos or seed banks.

In Situ Conservation

The process of protecting an endangered species in its natural habitat, as opposed to ex situ conservation, which involves protecting species by removing part of the population from a threatened habitat.

Biodiversity Hotspot

A region that is significantly rich in biodiversity and is under threat from human activities.