Question

Which of the following statement(s) is correct?

(x) Organizers of an outdoor concert in a park surrounded by residential neighborhoods will always consider the noise and traffic cost to residential neighborhoods when they assess the financial profitability of the concert venture.

(y) The social cost of pollution includes the private costs of the producers plus the costs to those bystanders adversely affected by the pollution.

(z) If another driver enters a crowded highway, then the travel times of all other drivers on the highway is increased. This is an example of a negative externality.

Select one or more:

a. (x), (y) and (z)

b. (x) and (y) only

c. (x) and (z) only

d. (y) and (z) only

e. (y) only

Answer 1

answer is D

Reason

(y) The social cost of pollution includes the private costs of the producers plus the costs to those bystanders adversely affected by the pollution. social cost includes = private cost to producer + cost to bystanders.

(z) If another driver enters a crowded highway, then the travel times of all other drivers on the highway is increased. This is an example of a negative externality. reason for the same is that already negative externality is existing in form of crowded highway and it is time consuming for all other person driving on the same highway but incoming of one more driver increased the time for other traveller and it causes delay to each person on that highway.