Jason and Lauren live in the countryside 30 minutes from a large 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 house were zoned for an industrial property.A paper mill was built in the area and now emits strong gases that can be smelled from miles away.The paper mill's emission of gases is an example of a(n)
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 paper mill's emission of strong gases that impact the surrounding area and people like Jason and Lauren is an example of a good that imposes an external cost. The cost of the pollution is not internalized by the paper mill and is instead shifted to the surrounding community.

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