Multiple Choice
Which plan allows states to help decide methods of spending federal money to aid poor citizens?
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7. Externalities
Public Solutions to Externalities
Multiple Choice
Which of the following is a potential advantage of using nonrenewable resources over renewable resources in addressing externalities?
A
Nonrenewable resources are guaranteed to be less expensive in the long run.
B
Nonrenewable resources can be replenished quickly through natural processes.
C
Nonrenewable resources often have established infrastructure and technology, making them more immediately accessible.
D
Nonrenewable resources always have lower environmental impacts than renewable resources.
Verified step by step guidance1
Step 1: Understand the context of externalities in resource use. Externalities occur when the production or consumption of a good affects third parties not directly involved, often leading to social costs or benefits not reflected in market prices.
Step 2: Identify the characteristics of nonrenewable resources, such as fossil fuels, which include limited availability and slower replenishment rates, but often have well-developed extraction and usage technologies.
Step 3: Compare nonrenewable and renewable resources in terms of infrastructure and technology. Nonrenewable resources typically benefit from established systems that allow for immediate and efficient use, which can be advantageous when addressing externalities quickly.
Step 4: Evaluate the given options by considering economic and environmental factors. For example, nonrenewable resources are not guaranteed to be less expensive in the long run, nor can they be replenished quickly, and they often have higher environmental impacts compared to renewables.
Step 5: Conclude that the potential advantage of nonrenewable resources in this context is their established infrastructure and technology, which makes them more immediately accessible for addressing externalities.
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