A Plausible Example of Market Failure Due to an Externality

question 79

Multiple Choice

A plausible example of market failure due to an externality is

• A)the cost of building new highways outside of major cities.
• B)the despoiling of rivers and lakes by nitrogen run-off from agricultural fertilizers.
• C)the high salaries enjoyed by professional athletes.
• D)the line-ups at the theatre when a good movie is playing.
• E)a farmer with an apple orchard who also keeps bees.

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Definitions:

Pudendal Block

A regional anesthesia technique used during childbirth to numb the pudendal nerve and reduce pain in the lower part of the vagina and perineum.

Herbal Supplements

Products made from plants or plant extracts that are ingested to maintain or improve health.

Anaesthetic

A substance used to induce a temporary loss of sensation or awareness, typically to perform surgical procedures without discomfort to the patient.

Anxiety

A feeling of worry, nervousness, or unease about something with an uncertain outcome, which can also be a disorder characterized by chronic, excessive worry.