The depletion of rainforests due to human activities like logging or cattle ranching is an example of _____
A)a negative externality.
B)a positive externality.
C)adverse selection.
D)moral hazard.
E)arbitrage.

Question

Quizplus · Accepted Answer

The depletion of rainforests due to human activities like logging or cattle ranching results in negative externalities, i.e., the costs of these activities are borne by society as a whole in the form of loss of biodiversity, soil degradation, climate change, etc. while the benefits are captured by the individuals or firms engaged in these activities.

The Depletion of Rainforests Due to Human Activities Like Logging