Question

Which of the following is an example of a negative externality?a. bad weather reduces the size of the wheat cropb. a reduction in the size of the wheat crop causes the income of wheat farmers to fallc. smoking harms the health of nonsmokers who are nearbyd. smoking harms the health of the smokere. all of the above

Answer 1

Answer: Negative externality is defined as the cost that is incurred by a individual who isn't involved in the economic transaction.

In the above question, the following is the example of negative externality: smoking harms the health of nonsmokers who are nearby.

Here, the cost is incurred by the nonsmokers who are standing nearby individuals who prefer smoking. Thus creating negative externality.

Therefore, the correct option is (c)