An Externality Exists When

question 44

Multiple Choice

An externality exists when

• A) goods are sold in specific geographic locations.
• B) some of the benefits or costs associated with a good are borne by third parties.
• C) the government taxes a good.
• D) the government subsidizes a good.

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Definitions:

Pyroclastic Flow

A fast-moving current of hot gas and volcanic materials (ash, lava fragments) that flows down the sides of a volcano during an explosive eruption.

Lahar

A mudflow mostly composed of volcanic-derived materials and generally formed on the flank of a volcano.

Composite Volcanoes

Volcanoes constructed from multiple layers of lava flows, volcanic ash, and other volcanic debris, characterized by steep profiles and periodic explosive eruptions.

Lahars

Volcanic mudflows or debris flows that occur when volcanic materials become saturated with water and rapidly move down slopes.