An Example of an Externality Is

question 64

Multiple Choice

An example of an externality is:

• A)a drought reducing wheat production in Australia
• B)an increase in the price of bread after a sales tax is imposed
• C)a new road that increases noise levels in adjacent houses
• D)a firm that loses market share after a new firm enters the market

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Definitions:

Per Capita GDP

A measure of the total economic output of a country divided by the number of people, reflecting the average economic performance per person.

Natural Capital Degradation

The decline in the quality and quantity of natural resources such as air, water, and soil due to human activities or natural processes.

Economic Development

The process of improving the economic well-being and quality of life for a community, by increasing incomes and reducing poverty.

Pollution Cleanup

The removal of pollutants from the environment, including soil, water, and air, to reduce their harmful effects on human health and ecosystems.