Which of the following is NOT an example of an activity with an external cost?
A) Noise pollution from a steel mill.
B) Keeping junk in the front yard.
C) A car burning oil.
D) Having to buy batteries for the remote that came with the new TV.
E) Speeding on the Trans-Canada Highway.

Question

Quizplus · Accepted Answer

Having to buy batteries for a remote that came with the new TV is not an example of an activity with an external cost. The cost of buying batteries is an internal cost because it is borne by the individual purchasing the batteries and is not imposed on others in the form of a negative externality. A, B, C, and E are all examples of activities with external costs because they create negative spillover effects on others in the form of pollution, disruption, or danger.

Which of the Following Is NOT an Example of an Activity