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Which of the Following Situations Reflects a Nonpecuniary Externality

Question 54

Multiple Choice

Which of the following situations reflects a nonpecuniary externality?


A) A chain of retail stores opens in an area which increases the demand and price of labor.
B) The sudden steep rise in oil prices lead to the enactment of a complex regulatory system which instead stimulates the demand for oil.
C) Toxic waste from a chemical manufacturing firm pollutes the water supply for a meat packaging industry in the area.
D) Toxic waste from a chemical manufacturing firm pollutes the water supply in the area which leads to a steep fall in real estate prices in the area.

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