Which of the Following Situations Is Descriptive of the Existence

question 29

Multiple Choice

Which of the following situations is descriptive of the existence of a negative externality.

• A)Vernon studies for his biology test late into the night and oversleeps the next morning, thus missing the test.
• B)Nancy is in the library looking for a book.She is talking to herself and consequently disturbs a few people in the library.
• C)Bob learns later that he could have purchased a pair of shoes for less than he paid.
• D)Jackie has had the flu and has stayed in bed for a week.
• E)none of the above

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Definitions:

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, often leading to a welfare loss.

Government Failure

A situation where government intervention in the economy creates inefficiency and leads to a misallocation of resources.

Federal Money

Funds provided by the federal government, often to support state or local projects, policies, or to provide social services.

Incentive-based Regulation

A regulatory approach that uses rewards or penalties to motivate entities to perform in ways that align with policy goals or regulatory standards.