Question

Which of the following situations is descriptive of the existence of a negative externality. Vernon studies for his biology test late into the night and oversleeps the next morning, thus missing the test. Nancy is in the library looking for a book. She is talking to herself and consequently disturbs a few people in the library. Bob learns later that he could have purchased a pair of shoes for less than he paid. Jackie has had the flu and has stayed in bed for a week. none of the above

Answer 1

Answer: I think it is Nancy is in the library looking for a book. She is talking to herself and consequently disturbs a few people in the library.

Explanation:

There are good externalities and bad externalities in economics. A good externality is when for example a farm of flowers is situated next to a producer of honey. The farmer benefits from the polinization of his flowers and the honey producer from the pollen and nectar that bees take from the flowers to produce honey. A negative externality is something like in the case mentioned of Nancy who reads aloud and disturbs other people in the library and doesn't let them read peacefully.