Which of the following is an example of a negative externality?
A) A Japanese company begins to produce cars, which causes American workers to lose their jobs.
B) An employee of a chemical company spills acid on his arm, causing severe damage.
C) John plants fruit trees in his front yard, which attracts bees, which sting neighbor Mary.
D) Sally buys coffee at McDonald's, spills some on her, and burns her arm.
E) Jack attempts to fix his roof, falls off, and breaks his leg.

Question

Quizplus · Accepted Answer

Option C is an example of a negative externality because John's decision to plant fruit trees has a negative effect on his neighbor Mary, who gets stung by the bees attracted to the trees. The cost of John's decision is borne by someone else who did not make the choice. The other options do not involve external costs imposed on someone else by the decision of one person.

Which of the Following Is an Example of a Negative