What is a negative externality as illustrated by the hotel and paper factory?
Understanding Externalities and Their Impact on Society

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Social Studies, Business, Biology
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Hard
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5 questions
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1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
A government subsidy
A direct transaction between two parties
A cost imposed on a third party
A benefit received by a third party
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How did the local government address the pollution caused by the paper factory?
By increasing the production of paper
By reducing the price of paper
By enforcing the installation of filters
By closing the factory
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What happens to the supply curve when a factory internalizes its social costs?
It becomes vertical
It shifts to the left
It remains unchanged
It shifts to the right
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which of the following is NOT a method to combat negative externalities?
Creating public awareness
Regulation and fines
Assigning property rights
Increasing production
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is one way governments encourage the use of electric cars to reduce emissions?
By providing financial incentives
By increasing road tolls
By banning petrol cars
By reducing taxes on petrol
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