Economics 9708 · AS & A Level · 7.4

7.4 — practice question

Give one example of an externality.

  • AProduction of good X directly affects the cost of producing good Y.
  • BThe entry of a new firm reduces the profits of existing firms producing good X.
  • CThe introduction of bus-only lanes reduces the travel times of bus passengers.
  • DThe opening of a new underground railway reduces the revenue of bus operators.

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI