Why Are Negative Externalities Difficult to Measure in Practice

question 35

Multiple Choice

Why are negative externalities difficult to measure in practice?

• A) because most external costs are nonpecuniary in nature
• B) because the marginal value of cleaner air is close to zero
• C) because the effects of pollution are subjective in nature
• D) because some resources are owned by society and therefore have no opportunity cost

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Definitions:

Misinformation Effect

The phenomenon where a person's recall of episodic memories becomes less accurate because of post-event information.

Memory

The faculty by which the mind stores and remembers information, allowing learning and adaptation from past experiences.

Misleading Information

Incorrect or misleading facts presented to an individual, which may affect their perceptions, decisions, or memories.

Event

An event is an occurrence or happening, often significant or memorable, that can be isolated in time and space or be part of a series.