On the Fourth of July, There Is No Fireworks Display

question 448

Multiple Choice

On the Fourth of July, there is no fireworks display in the small town of Yankeeville, even though it would be efficient for such a display to be produced. Which of the following statements is correct?

• A)The lack of a fireworks display in Yankeeville arises because of an externality.
• B)The lack of a fireworks display in Yankeeville is a case of market failure.
• C)In deciding not to produce a fireworks display in Yankeeville, private individuals and private firms made decisions that were privately rational but socially inefficient.
• D)All of the above are correct.

---

Definitions:

Shi Huangdi

The founder of the Qin dynasty and the first emperor of a unified China, known for his major reforms and monumental construction projects like the Great Wall of China.

Emperor Huizong

A Chinese emperor of the Song dynasty, remembered for his patronage of the arts and his disastrous political and military decisions.

Lady Feng

A revered figure in Chinese history, known for her bravery and loyalty during the Western Han Dynasty.

Yingxian

Refers to the location of the Wooden Pagoda, a famous and ancient towering structure in Shanxi, China, known for its architectural significance.