Consider a housing development built near an existing airport. After the houses are occupied, homeowners complain that the airport imposes a negative externality on them and it should be moved or otherwise limited. Is the airport a negative externality?
A) No, the airport was there first.
B) No, if the original property values reflect the costs imposed by the airport.
C) No, airports are government entities and therefore don't impose costs on individuals.
D) Yes, the airport's noise should be curtailed for the well-being of the homeowners.
B
You might also like to view...
According to the text, the AT&T corporation was deregulated primarily by
a. requiring that competing companies have access to AT&T's facilities b. declaring AT&T the legitimate monopoly of telephone service in the United States c. creating a special Telephone Advisory Commission d. ending all government regulations regarding the domestic telephone industry e. requiring AT&T to share patents with competitors
Which of the following would cause the price level to fall and output to rise in the short run?
a. an increase in the money supply b. a decrease in the money supply c. an adverse supply shock d. a favorable supply shock