Consider a Housing Development Built near an Existing Airport

question 101

Multiple Choice

Consider a housing development built near an existing airport.After the houses are occupied,homeowners complain that the airport imposes a negative externality on them and it should be moved or otherwise limited.Is the airport a negative externality?

• A) No, the airport was there first.
• B) No, if the original property values reflect the costs imposed by the airport.
• C) No, airports are government entities and therefore don't impose costs on individuals.
• D) Yes, the airport's noise should be curtailed for the well-being of the homeowners.

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Definitions:

Maker

In finance, the party that creates or issues a financial instrument, such as a check.

Principal

The original sum of money borrowed in a loan, or the original amount invested, excluding any interest or dividends.

Accounts Receivable

Money owed to a business by its clients for goods or services delivered but for which payment has not yet been received.

Credit

An accounting entry that increases the balance of liabilities and equity accounts, and decreases the balance of assets accounts. It is also the provision of resources (such as money) by one party to another with the expectation of repayment.