Which of the following is the best example of an action that imposes an external cost?
a. Wear and tear on your car as the result of frequent use.
b. Deterioration in the average quality of a house you own as the result of poor maintenance.
c. Water pollution from an upstream factory that increases the cost of providing clean water to downstream residents.
d. A rose garden on your property from which your neighbor gets much enjoyment.
c
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A short-term debt instrument issued by well-known corporations is called
A) commercial paper. B) corporate bonds. C) municipal bonds. D) commercial mortgages.
The graph above shows domestic supply and demand with trade in a SMALL country. With trade, this country can purchase at the world price, Pw. Suppose that this country imposes a $5 per unit tariff on this good. Which of the following is true?
A) The domestic price will rise by $5. B) Consumers will be better off. C) There will not be deadweight losses due to this tariff, since it is a small country. D) Producers will not increase domestic production.