Question 56

Moving a noisy, large manufacturing plant to a small town creates a negative externality.

This action is likely to have detrimental effects on the local community, such as increased noise pollution and potential harm to residents' quality of life, which are not accounted for in the decision-making process.

A) Taking a commuter train with frequent stops to work

This option is unlikely to create a negative externality as it generally promotes public transportation use, reducing traffic congestion and lower emissions compared to individual car use. Therefore, it is not associated with any significant adverse effects on third parties.

B) Expanding the number of beehives near an apple orchard

This action is beneficial as it enhances pollination, thereby improving apple yields. The expansion of beehives provides positive externalities to farmers and the environment, rather than creating negative consequences for the surrounding area.

C) Building a private school in a rural and underdeveloped area

While this option may have limited benefits for the local population, as it could provide educational opportunities, it does not inherently create negative externalities. Instead, it can contribute positively to the community by providing jobs and improving local education.

D) Moving a noisy, large manufacturing plant to a small town

This choice creates a negative externality as it can lead to increased noise pollution and other disturbances for the local residents. The negative impacts on the community, such as decreased property values and compromised living conditions, are significant and often overlooked in such decisions.

Conclusion

Moving a noisy, large manufacturing plant to a small town is definitively the correct answer, as it leads to adverse effects on the community that are not reflected in the plant's operational costs. In contrast, the other options either provide positive benefits or do not result in significant negative impacts on surrounding individuals or environments.