Question

24. Which is an example of a negative externality? A. An increase in the value of land you own when a nearby development is completed B. The costs paid by a company to build an automated factory C. Decreased property values in a neighborhood where several houses are burglarized

Answer 1

The correct answer is C. Decreased property values in a neighborhood where several houses are burglarized

Step-by-step explanation:

A transaction involves two parties, for example, consumer and the seller, who are referred to as the first and second parties. Any other party that is not related to the transaction is referred to as a third party. A negative externality is a cost that is suffered by a third party as a consequence of an economic transaction. Negative externalities occur when the consumption of a good exerts a negative effect on a third party outside the market.

From the given options, the correct one is C. Decreased property values in a neighborhood where several houses are burglarized.