Which of the Following Does NOT Provide an Example of an Externality

question 45

Multiple Choice

Which of the following does NOT provide an example of an externality?

• A) the view that passers-by and neighbours enjoy when observing your rose garden
• B) the pleasure you get from purchasing a new pair of shoes
• C) the air pollution generated when you drive your car
• D) the free concerts neighbours hear when an accomplished musician practices at home

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Definitions:

Insider

An individual with access to confidential or non-public information about a company, often used in the context of insider trading.

Securities and Exchange Act

A U.S. law enacted in 1934 that governs the securities industry, aiming to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

Directors

Persons chosen by the corporation's shareholders to supervise management and make important strategic choices for the company.

Due Diligence Defense

A legal defense used in securities law, asserting that all required investigations and disclosures were made appropriately.