A Negative Externality

question 55

Multiple Choice

A negative externality:

• A) is a payment received to parties not involved in the production or consumption of a good.
• B) is a cost borne by parties not involved in the production or consumption of a good.
• C) results from the absence of well-defined property rights.
• D) is a cost borne by parties not involved in the production or consumption of a good and results from the absence of well-defined property rights.

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Definitions:

Presumed

Accepted as true or valid based on the evidence until proven otherwise.

Primary Obligation

The main or fundamental duty that a party is required to perform under a contract.

Debtor

An individual or entity that owes money or other obligations to another party, known as the creditor.

Exaggerated Claims

Statements that stretch the truth or make something seem more important or serious than it actually is.