Air pollution from automobile exhausts, and water pollution steel plants are examples of ?
Correct answer: B. negative externalities
- A. external economies
- B. negative externalities
- C. internal spillover
- D. social distortion
Explanation
Pollution imposes health and environmental costs on people who were not parties to the transaction, so it is a negative externality. External economies are beneficial spillover effects, making option a the opposite case.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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