Which of the Following Is an Example of an External

question 7

Multiple Choice

Which of the following is an example of an external benefit?

• A) More people start to install solar panels on their roofs, and as a result, electricity use goes down as does the pollution created by the generation of electricity.
• B) Firms are able to reduce their costs of production by using a more efficient technology.
• C) The city spends $500,000 to upgrade the local jail.
• D) A company opens a slaughterhouse at the end of your street.

---

Definitions:

Similar Stocks

Stocks from companies operating within the same industry or sector, sharing comparable financial characteristics or market behaviors.

Expected to Grow

This term refers to the anticipation of an increase in size, value, or quantity of an economic entity or variable.

Dividends Are Expected

A statement indicating that shareholders anticipate receiving a share of the profits from a company, usually distributed in the form of cash payments.

Investors Require

The expected return or conditions that investors seek before committing capital to an investment or project.