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Which of the following is not an example of an externality?

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Which of the following is NOT an example of an externality? Explain why the other examples are externalities and why the one you selected is not.

-government tax imposed on smog
-noise from a barking dog
-the loss of an ocean view because of new construction
-improved property values when a rundown house is remodeled
-groundwater pollution from an industrial facility

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Solution Summary

This solution addresses the following externalities question:

Which of the following is NOT an example of an externality? Explain why the other examples are externalities and why the one you selected is not.

-government tax imposed on smog
-noise from a barking dog
-the loss of an ocean view because of new construction
-improved property values when a rundown house is remodeled
-groundwater pollution from an industrial facility

Solution Preview

Improved property values when a rundown house is remodelled. This is not a negative externality.

A government tax imposed on smog is an externality because if there were no smog, it would not increase profits for the company or entity that cleaned the ...

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