Which of the following effects from adopting a new agricultural technology is considered a spillover effect?

Question

Quizplus · Accepted Answer

A spillover effect is a positive or negative external effect of an action that affects third parties who did not choose to incur that effect. When a new agricultural technology leads to an increase in food supply, it tends to lower the price of food for consumers, which is a spillover effect on the rest of the economy. This is not a direct benefit for the farmers themselves, but rather an unintended benefit for the consumers. Choices A and B are direct effects on the farm and its labor, respectively, while choice D is a negative effect on the farm profit, which is not a spillover effect but rather an internal effect.

Which of the Following Effects from Adopting a New Agricultural