Which of These Is an Example of an External Cost

question 47

Multiple Choice

Which of these is an example of an external cost?

• A)an increase in the value of land you own when a nearby development is completed.
• B)the costs paid by a company to build an automated factory.
• C)decreased property values in a neighbourhood where several houses are burglarized.
• D)the higher price you pay when you buy a heavily advertised product.

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Definitions:

Psychological Tension

A mental or emotional strain resulting from conflicting, demanding, or challenging situations.

Creditworthiness

A valuation of the likelihood that a borrower can fulfill their financial obligations.

Economic Significance

Refers to the impact of a phenomenon, action, or policy on the economy's performance, often measured through its effects on growth, employment, and productivity.

Repeated Experience

An occurrence or event that happens multiple times, allowing individuals or organizations to gain insight or familiarity through its repetition.