Since Air Pollution Creates a Negative Externality

question 64

Multiple Choice

Since air pollution creates a negative externality,

• A)social welfare will be enhanced when some, but not all air pollution is eliminated.
• B)social welfare is optimal when all air pollution is eliminated.
• C)governments should encourage private firms to consider only private costs.
• D)the free market result maximizes social welfare.

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Definitions:

Mutual Funds

Investment vehicles that pool money from various investors to purchase a diversified portfolio of stocks, bonds, or other securities.

Premium

The amount paid for a product or service above its nominal or face value.

Horizontal Acquisitions

A form of corporate acquisition where a company buys another company that operates in the same industry at the same level of the supply chain.