Your Neighbor Has Just Planted Some Fragrant Flowers

question 104

Multiple Choice

Your neighbor has just planted some fragrant flowers. The wonderful scent drifts into your room and makes you happy.

• A) This scent is an internal cost to you.
• B) This cannot be an externality since you are enjoying the scent.
• C) This is an externality since you get a benefit from your neighbor's flowers.
• D) The social cost of this activity is entirely borne by you neighbor.

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Definitions:

Quantity Demanded

The complete volume of a good or service that consumers are prepared and able to buy at a certain price point.

Quantity Supplied

The quantity of a product or service that sellers are prepared to offer for sale at a set price during a particular timeframe.

Corn-Based Ethanol

An alternative fuel derived from fermenting and distilling starch crops like corn, used primarily to reduce petroleum use, decrease greenhouse gas emissions, and promote agricultural jobs.

Production

The process of creating goods or services.