Externalities - Definition and examples

1. MULTIPLE CHOICE:

An externality arises when a firm or person engages in an activity that affects the well-being of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is beneficial, it is called a _______ externality.

An externality arises when a firm or person engages in an activity that affects the well-being of a third party, yet neither pays nor receives any compensation for that effect. If the impact on the third party is beneficial, it is called a W externality. O Supply Demand O Supply PRICE (Dollars per unit) Demand QUANTITY (Units)With this type of externality, in the absence of government intervention, the market equilibrium quantity produced will be W than the socially optimal quantity. - greater Which of the following generate(s) the type of externality previously described? Check all that apply. Your roommate, Yvette, bought a cat to which you are allergic. Jacques planted several trees in his backyard that increase the beauty of the neighborhood, especially during the fall foliage season. A leading software company decided to increase its research budget for inventing new open-source technologies. The city where you live turned the publicly owned land next to your house into a park, causing trash dropped by park visitors to pile up in your backyard