Which of the following is an example of an external cost?
Question 4 options:
a loud, crying baby in a public restaurant
emissions of methane into the atmosphere
a homeowner who likes to mow the lawn at 7 a.m. on Saturday morning
all of the above
I say all of the above
Yes, all of the above.
You are correct, all of the options listed are examples of external costs. An external cost is a negative consequence or impact of a certain action or behavior that is not directly borne by the person or entity responsible.
In the first option, a loud, crying baby in a public restaurant can be seen as an external cost because it affects the other customers in the restaurant who may find it disruptive or disturbing. The parents of the crying baby may not directly bear the cost of the discomfort caused to others.
In the second option, emissions of methane into the atmosphere contribute to environmental pollution and climate change. This is an external cost because the negative effects are not directly paid for or borne by the entity emitting the methane, but rather by society at large.
In the third option, a homeowner mowing the lawn at 7 a.m. on a Saturday morning may cause noise pollution and disturb their neighbors. This is also considered an external cost because the inconvenience experienced by the neighbors is not directly compensated or accounted for by the homeowner.
So, all of the given options can be seen as external costs because they involve actions that impose negative effects on others without bearing the full responsibility or cost of those impacts.