Economics 9708 · AS & A Level · 7.4

7.4 — practice question

A company sets up a new factory on the town’s outskirts. Which items would be among the externalities resulting from the opening of this new factory?

  • Aincrease in traffic congestion: no; increase in wages paid to workers in a neighbouring factory: no; increase in sales revenue of local shopkeepers: yes
  • Bincrease in traffic congestion: no; increase in wages paid to workers in a neighbouring factory: yes; increase in sales revenue of local shopkeepers: yes
  • Cincrease in traffic congestion: yes; increase in wages paid to workers in a neighbouring factory: no; increase in sales revenue of local shopkeepers: no
  • Dincrease in traffic congestion: yes; increase in wages paid to workers in a neighbouring factory: yes; increase in sales revenue of local shopkeepers: no

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