Which of the Following Situations Reflects a Nonpecuniary Externality

question 55

Multiple Choice

Which of the following situations reflects a nonpecuniary externality?

• A) A chain of retail stores opens in an area which increases the demand and price of labor.
• B) The sudden steep rise in oil prices lead to the enactment of a complex regulatory system which instead stimulates the demand for oil.
• C) Toxic waste from a chemical manufacturing firm pollutes the water supply for a meat packaging industry in the area.
• D) Toxic waste from a chemical manufacturing firm pollutes the water supply in the area which leads to a steep fall in real estate prices in the area.

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Definitions:

Fly

In the context of an organism, a fly is a small winged insect belonging to the order Diptera; known for its ability to fly quickly.

Suffix

A morpheme added at the end of a word to form a derivative or to indicate grammatical features such as tense, mood, person, number, case, and gender.

Predict

To declare or indicate in advance, especially on the basis of special knowledge or inference.

Suffix

A letter or group of letters added at the end of a word to modify its meaning or change it into a different word class.