BUISENESS MANAGEMENT
BUSINESS STRUCTURE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the producers making decision that harm the buyers.
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the buyers not purchasing enough of a product.
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an objective 3rd party ruling against the labor union.
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a 3rd party being negatively affected by the production of a good/service.
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Detailed explanation-1: -A negative externality exists when a cost spills over to a third party. A positive externality exists when a benefit spills over to a third-party. Government can discourage negative externalities by taxing goods and services that generate spillover costs.
Detailed explanation-2: -A negative externality is a cost that is suffered by a third party as a consequence of an economic transaction. In a transaction, the producer and consumer are the first and second parties, and third parties include any individual, organisation, property owner, or resource that is indirectly affected.
Detailed explanation-3: -When negative externalities are present, it means the producer does not bear all costs, which results in excess production. With positive externalities, the buyer does not get all the benefits of the good, resulting in decreased production.
Detailed explanation-4: -Negative externalities commonly affect public resources where it is difficult to hold parties accountable such as in a case of environmental pollution. Producers or consumers may create a negative externality without worrying about lawsuits or fines.
Detailed explanation-5: -A negative externality exists when the production or consumption of a product results in a cost to a third party. Air and noise pollution are commonly cited examples of negative externalities.