Which of the Following Is True of a Negative Externality

question 98

Multiple Choice

Which of the following is true of a negative externality?

• A) Some costs are borne by a third party.
• B) The government can use subsidies to encourage firms to internalize the externality.
• C) The government must take over the production of this good so that the externality can be internalized.
• D) Some benefits accrue to a third party.
• E) Its existence always requires corrective measures by the government.

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Definitions:

Collaborative Conflict

A conflict resolution approach where parties work together to find a mutually beneficial solution, emphasizing cooperation over competition.

Communication Efforts

Attempts or actions taken to convey, share, or exchange information, feelings, or ideas with others.

Expanding the Pie

A negotiation strategy aimed at increasing the available resources or options so that all parties can achieve more favorable outcomes.

Scarce Resources

Economic or environmental term referring to limited availability of resources that are desired or needed.