📚 Learning Guide
Negative Externalities in Consumption
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Homeowners planting trees is to neighbors dealing with fallen leaves as factories polluting air is to ___?

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Learning Path
Learning Path

Question & Answer
1
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2
Review Options
3
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4
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Choose the Best Answer

A

local community suffering from health issues

B

factories improving production efficiency

C

government increasing taxes

D

consumers enjoying lower prices

Understanding the Answer

Let's break down why this is correct

Answer

Homeowners planting trees can create a beautiful environment, but their fallen leaves can be a hassle for neighbors, similar to how factories that pollute the air might negatively impact the health and enjoyment of nearby residents. In this case, the negative externality is the unwanted side effect of a homeowner's decision, just like the pollution from factories affects the community. For example, if a factory releases smoke and chemicals into the air, people living nearby might experience health problems or have to deal with dirty air. This connection shows how one person's actions can impact others in ways they might not consider. Therefore, the answer to the analogy is that factories polluting air is to neighbors suffering from poor air quality.

Detailed Explanation

When factories pollute the air, it affects everyone nearby. Other options are incorrect because This suggests that pollution is good for factories; This implies that pollution leads to higher taxes.

Key Concepts

Negative externalities in consumption
Market failure
Government intervention
Topic

Negative Externalities in Consumption

Difficulty

medium level question

Cognitive Level

understand

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