Which action will create a negative externality?
Moving a noisy, large manufacturing plant to a small town creates a negative externality.
This action imposes costs on the local community, such as noise pollution and decreased property values, which are not reflected in the market price of the goods produced by the manufacturing plant. Such external costs affect third parties who are not involved in the economic transaction of the plant's operations.
Constructing a private school generally provides positive externalities, such as improved education opportunities for local children and potential economic growth for the community. This action typically benefits both the students and the surrounding area, enhancing overall community welfare rather than imposing costs.
Using public transportation like a commuter train usually generates positive externalities, including reduced traffic congestion and lower carbon emissions. This mode of transport benefits not only the commuter but also the broader community by contributing to a cleaner environment and less crowded roads.
Increasing beehives near an apple orchard creates beneficial externalities, as the bees pollinate the apple trees, leading to improved crop yields. This mutually beneficial relationship enhances agricultural productivity and supports local biodiversity, positively impacting the environment and economy.
This action introduces significant negative externalities, including noise pollution and potential health issues for residents. The local community bears the brunt of these external costs without compensation, illustrating the detrimental effects of such a decision on third parties.
Negative externalities arise when the actions of individuals or businesses impose costs on others who are not part of the decision-making process. In this scenario, relocating a noisy manufacturing plant to a small town incurs external costs that affect local residents, contrasting with the positive impacts seen in the other options. Recognizing and addressing negative externalities is crucial for promoting community welfare and sustainable economic growth.
Related Questions
View allA food truck owner notices that the truck runs out of food every time...
Which market structure is characterized by firms that have no market p...
Which characteristic is associated with a traditional economy?
Economists often advocate for full product details on behalf of both b...
A bakery spends $140 per day on fixed costs and $90 per day for labor...
Related Quizzes
View all0PC1 Planning Instructional Strategies for Meaningful Learning Version 1
AP01 Elementary Literacy Curriculum Version 1
AQ01 Applied Healthcare Statistics C784 Version 1
ASO1 Introduction to Statistics for Research Version 1
BJ01 Introduction to Business Finance Version 1
C172 Network and Security Foundations Version 1
C180 Introduction to Psychology Version 1
C180 Introduction to Psychology Version 2
CKC1 Introduction to Humanities Version 1
DZ01 Mathematics for Elementary Educators III MATH 1330 Version 1
- ✓ 500+ Practice Questions
- ✓ Detailed Explanations
- ✓ Progress Analytics
- ✓ Exam Simulations