A Familiar Example of a Negative Externality Is Loud Music

question 23

Multiple Choice

A familiar example of a negative externality is loud music on a university campus.In principle,it should be possible to internalize this externality by permitting students to negotiate rights to play music during particular times.The most likely reason that these negotiations do NOT happen is that:

• A) most students are unfamiliar with the Coase theorem.
• B) the transaction costs associated with identifying and establishing communication with students would be high.
• C) music is an experience,not a good.
• D) some students don't view loud music as a negative externality.

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Definitions:

Noise Pollution

Unwanted or harmful outdoor sound that is produced by industrial or human activities, affecting the health and well-being of humans and wildlife.

Urban Dwellers

Individuals who live in densely populated areas known as cities or towns, often experiencing a lifestyle that contrasts with rural living.

Zoning

The process of dividing land in a municipality into zones in which certain land uses are permitted or prohibited.

Land Use

The way in which and the purposes for which land is managed and used, including agricultural, residential, industrial, and recreational purposes.