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Which of the Following "Externalities" Does Not Distort the Allocation

question 15

Multiple Choice

Which of the following "externalities" does not distort the allocation of resources?
I.An individual's unwillingness to cut his or her own lawn in an otherwise immaculately kept neighborhood.
II.Smoke produced by a new firm in an area that raises the costs of other firms.
III.A new firm's bidding up skilled wages in an area,thus raising costs of other firms.
IV.An individual's unwillingness to obtain job training,thereby lowering the total GNP.


Definitions:

Legally Non-Existent

Refers to an entity or agreement that has no recognition or validity under the law.

Respondeat Superior

A legal doctrine holding an employer or principal legally responsible for the wrongful acts of an employee or agent, when such acts occur within the scope of employment or agency.

Subagent

An agent appointed by another agent to perform tasks or duties on behalf of the original agent's principal.

Authorized Transaction

A financial operation that has been approved or permitted by the relevant authorities or parties involved.

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