Which of the Following Is a Real-World Example of a Negative

question 17

Multiple Choice

Which of the following is a real-world example of a negative externality?

• A)You are craving a soda for lunch. However, the customer ahead of you in line at the hot dog stand buys the last can.
• B)National defense is available even for people who do not pay income taxes.
• C)A person seated in a non-smoking section of a restaurant decides to sneak a few puffs of a cigarette.
• D)A child receives a vaccination to prevent the spread of measles.

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Definitions:

Marginal Costs

The expense incurred from manufacturing an extra unit of a product or service.

Average Total Costs

The total costs (fixed and variable) of production divided by the quantity of output produced.

Average Fixed Costs

The total fixed costs divided by the quantity of output produced, indicating the cost per unit that does not change with output level.

Average Total Costs

The cost of producing each unit, calculated by dividing the entire production cost by the total number of units made.