Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A person smoking in public, affecting the health of others
B
A person buying a new car, creating jobs
C
A farmer planting more crops, increasing food supply
D
A company reducing prices, benefiting consumers
Understanding the Answer
Let's break down why this is correct
Answer
A negative externality in consumption happens when the actions of one person affect others in a harmful way, and this can lead to market failure. For example, when someone decides to smoke in a public place, they enjoy the pleasure of smoking, but others around them may suffer from secondhand smoke. This situation is a negative externality because the smoker does not have to pay for the health problems they cause to others, like increased risk of lung disease. As a result, the market fails to account for these extra costs, leading to more smoking than would be socially acceptable. This imbalance shows how individual choices can have wider impacts on society, which is why understanding negative externalities is important for creating effective policies.
Detailed Explanation
When someone smokes in public, it can harm the health of others nearby. Other options are incorrect because Buying a new car is usually seen as a good thing; Planting more crops increases food supply, which is generally positive.
Key Concepts
market failure
Topic
Negative Externalities in Consumption
Difficulty
easy level question
Cognitive Level
understand
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