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Of the Following, Which Is the Best Example of an Externality

Question 17

Multiple Choice

Of the following, which is the best example of an externality?


A) a decision made by a U.S. company to move its operations overseas
B) a decision by a company to fire undocumented workers
C) the pollution that results from a firm's manufacturing process but for which the firm doesn't have to pay
D) the share of a firm's profits that are donated to charities
E) the share of a firm's profits that are paid out as dividends to stock holders

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