If you dislike the smell of gardenias and you live next to a gardenia farm, the scent of gardenias that wafts over to you would be, in economic terms, a:
a. positive nuisance
b. nullified benefit.
c. pollutant.
d. negative externality.
d. negative externality.
The effect of a market exchange on a third party who is outside or “external” to the exchange is called an externality. A negative externality is a situation where a third party, outside the transaction, suffers from a market transaction by others.
You might also like to view...
In the aggregate demand-aggregate supply model, the economy's price level is assumed to be ________.
A. constant, just like in the aggregate expenditures model B. variable, unlike in the aggregate expenditures model C. constant, unlike in the aggregate expenditures model D. variable, just like in the aggregate expenditures model
When buying a used car from a dealer, showing up in cheap clothing and ungroomed is an example of:
A. screening. B. signaling. C. statistical discrimination. D. building a reputation.
A worker's accumulated investment in education, training, experience, and health is called:
a. derived labor demand. b. collective entrepreneurship. c. seniority. d. human capital.
Older Americans living on a pension and therefore on a fixed income, tend to be made
a. better off when prices rise. b. better off when the inflation rate rises. c. worse off when prices rise. d. worse off when prices fall.