Final answer:
A person driving while talking on a cellphone creates a negative consumption externality, while a beautiful sunset creates a positive consumption externality. Therefore, the correct answer to the question is: C)
Step-by-step explanation:
An externality occurs when an exchange between a buyer and seller has an impact on a third party who is not part of the exchange. An externality, which is sometimes also called a spillover, can have a negative or a positive impact on the third party. In the case of a negative externality, like a person driving while talking on a cellphone, it creates a negative consumption externality. This means that it imposes costs or harm on others who are not involved in the exchange. On the other hand, a beautiful sunset creates a positive consumption externality, as it provides enjoyment or benefits to others who are not part of the exchange.
The correct answer is C) a negative consumption externality; a positive consumption externality. A person driving while talking on a cellphone imposes risks on others, which is a negative consumption externality. A beautiful sunset creates pleasure for onlookers, which is a positive consumption externality.
A person driving while talking on a cellphone creates a negative consumption externality because it imposes a risk and potential costs on other road users who are not a party to the phone conversation. On the other hand, a beautiful sunset creates a positive consumption externality, as people can enjoy the view without affecting the sunset itself and without requiring any effort or payment from those who benefit from the experience.
Therefore, the correct answer to the question is: C) a negative consumption externality; a positive consumption externality.