Which of the Following Is a Good Example of a Negative

question 25

Multiple Choice

Which of the following is a good example of a negative externality?

• A) A forest that absorbs carbon dioxide and generates oxygen.
• B) A landfill that creates undesirable odors on surrounding property.
• C) A "big box" retail store that outcompetes existing retail stores.
• D) A rose garden in your front yard.

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Definitions:

Elastic Market Demand

Describes a market situation where the quantity demanded of a good or service significantly responds to changes in its price.

Perfectly Elastic Demand

Perfectly elastic demand is a market scenario where the demand for a product can drastically change (increase or decrease) at the slightest change in price, essentially to infinity.

Patents

Legal documents granted by the government giving an inventor exclusive rights to manufacture, use, or sell an invention for a certain number of years.

Innovation Incentives

Mechanisms or policies designed to encourage the development and implementation of new ideas, products, or methodologies.