Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Being able to continue driving
B
Requiring a refill to function properly
C
Reducing speed to save fuel
D
Increasing the distance traveled
Understanding the Answer
Let's break down why this is correct
Answer
Negative externalities in economics happen when a decision or action by an individual or company affects others in a harmful way, without those responsible having to pay for the damage. This creates a market inefficiency, just like when a car runs out of gas—it can't function properly anymore. When a car runs out of gas, it stops moving and can't take you to your destination, which is similar to how negative externalities can prevent a market from reaching its full potential. For example, if a factory pollutes the air, it affects the health of nearby residents, leading to increased medical costs and lost productivity. Just as a driver must refuel to continue their journey, society must address negative externalities to ensure markets work efficiently and benefit everyone.
Detailed Explanation
When a car runs out of gas, it needs more fuel to work again. Other options are incorrect because Some might think that a car can keep driving without gas; People might believe that slowing down helps save gas.
Key Concepts
Negative Externalities
Market Failure
Government Intervention
Topic
Negative Externalities and Market Failure
Difficulty
easy level question
Cognitive Level
understand
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