A Negative Externality

question 45

Multiple Choice

A negative externality

• A)is an adverse impact on a bystander.
• B)causes the product in a market to be under-produced.
• C)is an adverse impact on market participants.
• D)is present in markets where the good or service is undesirable for society.

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Definitions:

Propinquity

The tendency for people to form close relationships or feel a sense of attraction with others who are geographically close or frequently encountered.

Unbalance

A state of lack of equilibrium or stability, either physically, emotionally, or in terms of a system or situation.

Acquiescence

The act of agreeing or consenting without protest, often with little enthusiasm or conviction.

Homeostasis

The ability of a living organism to maintain stable internal conditions despite changes in external environments.