An Example of an Activity That Creates a Negative Consumption

question 101

Multiple Choice

An example of an activity that creates a negative consumption externality is

• A)logging,which pollutes rivers.
• B)locating beehives next to an orange orchard.
• C)smoking,which harms the health of a bystander.
• D)a flu vaccination.
• E)a sales tax.

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Definitions:

Net Income

The profit remaining after all expenses, taxes, and costs have been subtracted from total revenue.

Ratio

A quantitative relationship between two numbers, often used in financial analysis to assess the performance, liquidity, or solvency of a business.

Capital Account

In macroeconomics and international finance, a component of the balance of payments that records all transactions involving the purchase or sale of assets.

Ownership Interest

A stake or share in a company or asset, representing the rights and financial involvement of the owner.