Asked by Ahmed Aldughaither on Jun 11, 2024
Verified
Second hand cigarette smoke is an example of a(n)
A) economy of scale.
B) externality.
C) public good.
D) government failure.
Externality
Actions of one party impose costs or benefits on a second party.
Economy of Scale
The cost advantages that enterprises obtain due to their scale of operation, typically resulting in decreased per-unit cost as production increases.
Public Good
A good that is non-excludable and non-rivalrous, meaning it can be used by everyone and one person's use doesn't reduce its availability to others.
- Understand the principle of externalities, highlighting the distinction between positive and negative externalities.
- Point out examples of external phenomena in daily life and evaluate their consequences on the community.
Verified Answer
CR
Carlos R Zarate AparicioJun 17, 2024
Final Answer :
B
Explanation :
Second hand cigarette smoke is an example of an externality because it is a cost or benefit that affects a party who did not choose to incur that cost or benefit. In this case, it's a negative externality because it imposes a health cost on others without their consent.
Learning Objectives
- Understand the principle of externalities, highlighting the distinction between positive and negative externalities.
- Point out examples of external phenomena in daily life and evaluate their consequences on the community.