Which of the Following Is an Example of a Marginal

question 36

Multiple Choice

Which of the following is an example of a marginal external cost?

• A) A patron of McDonald's is burned when coffee is spilled on their lap.
• B) A firm's production costs increase because government regulations force it to provide more employee health benefits.
• C) The people who fish in a river find their catch decreasing because pollution from a factory is killing the fish.
• D) The price a corporation must pay for pollution control devices such as scrubbers.

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Definitions:

Asymmetric Information

A situation where one party in a transaction has more or superior information compared to another, often leading to an imbalance in the transaction.

Product Reviews

Evaluations or assessments of a product's performance, quality, and usefulness, typically written by consumers or experts.

Moral Hazard

The situation in which one party takes greater risks because another party bears the cost of those risks, often seen in insurance and financial sectors.

Contract Parties

The entities involved in a contractual agreement, typically including at least one offeror and one offeree.