Question

Sometimes food is produced in other countries that do not have the same level of chemical safety as in the US. This imported food is less expensive, but the people who eat it may consume less-expensive, more dangerous chemicals. Selling food that is laden with chemicals that are prohibited in the US at a cheaper price is:(A) affordable food creates an external benefit rather than an external cost-in-t case.(B) a good way to keep the powerful-US- food industry competitive.(C) chemical-food-safety-on imported food is an externality in this market, since producers in countries with fewer and less expensive regulations-do-not-bear costs of consuming the chemical hazards of this food.(D) a reasonable way to lower the cost of food.

Answer 1

Answer:

The correct answer is letter "A": affordable food creates an external benefit rather than an external cost in the case.

Explanation:

Externalities are costs third parties have to be responsible for even if they were not involved in causing the externality. There are positive externalities and negative externalities. Positive externalities are those that third parties benefit from. Negative externalities affect third parties.

Thus, importing less-expensive but chemically-dangerous food will create a positive externality to consumers purchasing those types of foods since less money is getting out of their pockets without them having to influence discounts.