Economics 0455 · IGCSE · Market failure

Market failure — practice question

A government has to decide how large a fine to impose on firms that create the external costs of air pollution in industrial areas. Which external cost would be hardest to put a money value on?

  • Athe discomfort associated with breathing
  • Bthe expenditure on additional healthcare
  • Cthe loss of earnings due to illness
  • Dthe medical research into respiratory disease

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