A Plausible Example of Market Failure Due to an Externality

question 20

Multiple Choice

A plausible example of market failure due to an externality is

• A) the line- ups at the theatre when a good movie is playing.
• B) a farmer with an apple orchard who also keeps bees.
• C) the cost of building new highways outside of major cities.
• D) the high salaries enjoyed by professional athletes.
• E) the despoiling of rivers and lakes by nitrogen run- off from agricultural fertilizers.

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Definitions:

Infantile Amnesia

The common inability of adults to recall memories from early childhood, typically before the age of 3 or 4.

Autism Spectrum Disorder

A developmental disorder characterized by challenges with social interaction, communication, and restricted or repetitive behaviors and interests.

Rigidly Fixated Interests

Intense, often narrowly focused areas of enthusiasm or concern, typically observed in individuals with Autism Spectrum Disorder.

Repetitive Behaviors

Actions or sequences of actions that are repeated multiple times in a similar manner, often observed in various psychological or developmental conditions.