The Net Increase to Total Surplus When a Negative Externality

question 21

Multiple Choice

The net increase to total surplus when a negative externality is internalized is due to:

• A)the transfer of surplus from those affected by the externality to the consumer.
• B)the reduced number of transactions in the market.
• C)the transfer of surplus from consumer or producer to those affected by the externality.
• D)None of these statements is true.

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Definitions:

Clients

Individuals or organizations that receive services or products from a professional or company in exchange for compensation.

Trust Increases

The process by which reliability and confidence in a person, organization, or system grow over time.

Wisdom Decreases

A notion suggesting a decline in wisdom, possibly due to various factors such as age, societal changes, or shifts in values.

Lasting Friendship

A deep and enduring bond between individuals characterized by mutual affection and sustained over a significant period.