Question
(02.07 MC) A large-scale grain farm relies on an adjacent river for irrigation and drainage and uses pesticides to protect otect crops from insects. Which of the following is a potential negative externality resulting from this activity? Higher prices for locally produced fruits Improved health for residents living nearby Damage to downstream plant and animal life Reduced demand for organic and raw produce
Solution
4.6
(196 Votos)
Karine
Mestre · Tutor por 5 anos
Resposta
The potential negative externality resulting from this activity is 'Damage to downstream plant and animal life'.
Explicação
## Step 1The problem is asking us to identify a potential negative externality resulting from a large-scale grain farm's activities. An externality is a cost or benefit that affects a party who did not choose to incur that cost or benefit. In this case, the farm's activities include irrigation, drainage, and the use of pesticides.## Step 2The options provided are:- Higher prices for locally produced fruits- Improved health for residents living nearby- Damage to downstream plant and animal life- Reduced demand for organic and raw produce## Step 3We need to identify which of these options is a negative externality. Negative externalities are costs that affect a party who did not choose to incur that cost.## Step 4The first option, higher prices for locally produced fruits, is not a negative externality. It is a potential effect of the farm's activities, but it does not directly affect the environment or other parties.## Step 5The second option, improved health for residents living nearby, is also not a negative externality. It is a potential benefit of the farm's activities, not a cost.## Step 6The third option, damage to downstream plant and animal life, is a negative externality. The use of pesticides can lead to runoff into the river, which can harm downstream plant and animal life.## Step 7The fourth option, reduced demand for organic and raw produce, is not a negative externality. It is a potential effect of the farm's activities, but it does not directly affect the environment or other parties.