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.

---

Definitions:

Ozone Loss

Ozone loss refers to the depletion of the ozone layer in the Earth's stratosphere, primarily caused by chemicals such as chlorofluorocarbons (CFCs), resulting in increased ultraviolet radiation reaching the Earth's surface.

Earth Summit

A conference that brings together leaders from around the world to discuss sustainable development and environmental protection.

Greenhouse Gas Emissions

The release of gases into the Earth's atmosphere, which trap heat and contribute to global warming and climate change.

Rio de Janeiro

A major city in Brazil known for its vibrant culture, stunning landscapes, and significant contributions to music, art, and tourism.