Which of the Following Illustrates the Concept of a Negative

question 240

Multiple Choice

Which of the following illustrates the concept of a negative externality?

• A) A college professor plays a vigorous game of racquet ball with the racquet he recently purchased.
• B) A flood wipes out a farmer's corn crop.
• C) A college student plays loud music on his new stereo system at 2:00a.m
• D) A janitor eats a hamburger during his lunch break.

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Definitions:

Equity Carve-out

A corporate strategy where a company creates a new, independent company by selling or distributing new shares of its existing business.

Antitrust Issues

Legal matters concerning regulations that prevent monopolies and promote competition, aiming to protect consumers and ensure fair business practices.

Conglomerate

A conglomerate is a large corporation that owns a number of different companies across various industries, often with no common business area.

Horizontal

In economic terms, horizontal integration refers to the process of a company increasing production of goods or services at the same part of the supply chain.