Which of the following is an example of an international externality, in which production (or consumption) activities in one country impose external costs on other countries?
A)Transborder pollution
B)Persistent dumping
C)Free riding
D)Moral hazard

Question

Quizplus · Accepted Answer

Transborder pollution is an example of an international externality because it refers to pollution that crosses borders and affects other countries. Production or consumption activities in one country may result in pollutants that harm the environment, economy, or human health in neighboring countries, but the costs are not borne by the polluters alone. Therefore, external costs are imposed on other countries. Persistent dumping (B) may also cause negative externalities for importing countries, but it typically involves selling products below cost or with lower quality standards, rather than polluting the environment. Free riding (C) and moral hazard (D) are concepts related to incomplete information, asymmetric information or adverse selection, but they do not necessarily involve international externalities.

Which of the Following Is an Example of an International