What Is a Negative Externality

question 91

Multiple Choice

What is a negative externality?

• A) a situation in which there are positive side effects of an action that benefit society
• B) a situation in which the agency responsible for regulating an industry is too sympathetic to the group it is supposed to regulate
• C) a situation in which the country is spending more every year than it is taking in from revenue
• D) a situation in which the total imports and foreign investment in America is greater than the total of exports and American investment abroad
• E) a situation in which a firm produces more of an unwanted good than is socially desirable

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Definitions:

Hypothesis

A proposed explanation made on the basis of limited evidence as a starting point for further investigation, serving as a premise to be tested.

Freshman Year

The first year of a student's high school or college education, often characterized by adjustment to new academic and social environments.

P-value

A statistical measure that helps determine the significance of results by indicating the probability of observing the results given that the null hypothesis is true.

Placebo Group

A control group in a clinical trial that receives a sham treatment, allowing researchers to measure the effect of the actual treatment by comparison.