Jason and Lauren live in the countryside 30 minutes from a main city in Virginia.They moved there because they wanted to enjoy the fresh air.After a year of living in their house,the 200 acres that surround their neighbor were zoned for an industrial property.A paper mill was built in the zoning and now emits strong gases that can be smelt from miles away,the paper mill's emission of gases are an example of a (an):
A)public good.
B)good that imposes an external cost.
C)good that provides an external benefit.
D)efficient good.

Question

Quizplus · Accepted Answer

The emission of strong gases by the paper mill imposes an external cost on the surrounding area and residents, as they are experiencing negative side effects without receiving any compensation or benefit. This is an example of a negative externality.

Jason and Lauren Live in the Countryside 30 Minutes from a Main