Dina Is Driving to Work on an Interstate Highway at 90

question 149

Multiple Choice

Dina is driving to work on an interstate highway at 90 MPH, well in excess of the legal speed of 65 MPH. Sandy is also driving to work at the same time, going 85 MPH. A state trooper pulls Dina over and gives her a speeding ticket. Sandy continues driving, but if Dina had not been speeding, the trooper would have ticketed Sandy instead. In terms of externalities, this story shows that:

• A) Sandy's actions gave Dina a positive externality.
• B) Dina's actions gave Sandy a positive externality.
• C) Sandy's actions gave Dina a negative externality.
• D) Dina's actions gave Sandy a negative externality.
• E) Dina's and Sandy's actions did not create any externalities.

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