Which of the Following Is an Example of a Negative

question 129

Multiple Choice

Which of the following is an example of a negative externality?

• A) planting flowers in your front yard
• B) talking loudly when others are trying to study economics
• C) people donating money to charity
• D) a smoker getting lung cancer

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Definitions:

Excise Tax

A tax levied on specific goods or services, such as alcohol, tobacco, and gasoline, usually to discourage their use or to generate revenue.

Negative Externality

A cost that affects a party who did not choose to incur it, often associated with the consumption or production of goods and services.

Price

The sum required, expected, or disbursed as a purchase price for an item.

Government-Provided Goods

Goods and services offered to the public by the government that might not be provided by the market or would be underprovided, such as public parks and national defense.