A-LevelEconomicsGovernment microeconomic intervention9708/12 · May/June 2014 · Q151 Mark
A firm opens a new factory on derelict ground on the outskirts of a town. What will be included among the externalities arising from the opening of the new factory? [Table showing impact on 'an increase in air pollution', 'an increase in the rents of neighbouring factory sites', 'the change in the appearance of the neighbourhood' for options A, B, C, D]
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Aan increase in air pollution: no, an increase in the rents of neighbouring factory sites: no, the change in the appearance of the neighbourhood: yes
Ban increase in air pollution: no, an increase in the rents of neighbouring factory sites: yes, the change in the appearance of the neighbourhood: no
Can increase in air pollution: yes, an increase in the rents of neighbouring factory sites: no, the change in the appearance of the neighbourhood: yes
Dan increase in air pollution: yes, an increase in the rents of neighbouring factory sites: yes, the change in the appearance of the neighbourhood: no
✓ Correct answer
C: an increase in air pollution: yes, an increase in the rents of neighbouring factory sites: no, the change in the appearance of the neighbourhood: yes
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