Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Pollution from a factory affecting nearby residents
B
A new park increasing property values in a neighborhood
C
A company donating to local charities
D
A neighbor planting flowers that beautify the street
Understanding the Answer
Let's break down why this is correct
Answer
A negative externality happens when someone’s actions cause harm or costs to others who are not involved in that activity. For example, if a factory produces goods but also releases pollution into the air, the nearby residents suffer from poor air quality and health issues, even though they are not part of the factory's operations. This pollution affects their daily lives, leading to possible sickness and increased healthcare costs. The factory benefits from making products and earning money, but the community bears the negative effects without being compensated. Thus, the pollution is a clear example of a negative externality, as it shows how one person's or company's actions can impact others negatively.
Detailed Explanation
Pollution from a factory is a negative externality. Other options are incorrect because A new park can raise property values, which is a positive effect; When a company donates to charities, it helps the community.
Key Concepts
negative externalities
Topic
Externalities and Their Effects
Difficulty
easy level question
Cognitive Level
understand
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