The Net Increase to Total Surplus When a Negative Externality

question 125

Multiple Choice

The net increase to total surplus when a negative externality is corrected or eliminated is due to:

• A)the transfer of surplus from those affected by the externality to the consumer.
• B)the reduced number of transactions in the market.
• C)the transfer of surplus from consumer or producer to those affected by the externality.
• D)None of these are true.

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Definitions:

Societal

Pertaining to or involving society or social communities, including their structures, issues, or behaviors.

Preventive

Relating to actions taken to prevent potential problems or damages before they occur.

Environmental Reporting

The process by which a company discloses information regarding its environmental impact and sustainability practices to stakeholders.

Ecological Issues

Concerns related to the impact of human activities on the environment, including pollution, loss of biodiversity, and climate change.