Which of the Following Is an Example of a Negative

question 87

Multiple Choice

Which of the following is an example of a negative externality?

• A) The discovery of one firm is freely copied by other firms.
• B) A firm dumps its industrial wastes into a nearby river.
• C) The government subsidizes research and development expenditures.
• D) A consumer buys more units of a product than she can consume.

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Definitions:

Contract

A lawful agreement among two or more parties that has legal authority and enforceability.

Respondeat Superior

A legal doctrine that holds an employer or principal legally responsible for wrongful actions taken by an employee or agent if such actions occur in the course of their employment or agency.

Unauthorized Acts

Unauthorized Acts are actions taken by an individual or entity that are not permitted or sanctioned by law, contract, or authority.

Agents

Individuals or entities authorized to act on behalf of another (the principal) in dealings with third parties.