Asked by Marah Owens on Jul 30, 2024
Verified
An example of ________ is a power plant generating water pollution.
A) a positive production externality
B) a negative production externality
C) a public good
D) the free-rider problem
Negative Production Externality
A situation in which the production of goods or services imposes costs on third parties not involved in the transaction, often not reflected in market prices.
- Grasp the principle of externalities and their impact on the welfare of society.
Verified Answer
GS
Gabriela SonzogniJul 31, 2024
Final Answer :
B
Explanation :
A negative production externality occurs when the production of a good or service imposes costs on third parties not involved in the market transaction, such as environmental pollution from a power plant.
Learning Objectives
- Grasp the principle of externalities and their impact on the welfare of society.