Question

The Kentucky government approves tax incentives to encourage more industry to move to the state. Which of the following statements best describes a potential negative externality? A. Development results in reduction of green space. B. Taxes for local road maintenance decrease. C. The state gambling industry fails to fund education. D. The state park system loses positive media coverage.

Answer 1

A) Development results in reduction of green space.

Step-by-step explanation:

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Answer 2

“Development results in reduction of green space” best describes a potential negative externality.

A negative externality is a cost that is suffered by a third party as a result of an economic transaction. In a transaction, the producer and consumer are the first and second parties, and third parties include any individual, organization, property owner, or resource that is indirectly affected. The correct answer between all the choices given is the first choice or letter A. I am hoping that this answer has satisfied your query and it will be able to help you in your endeavor, and if you would like, feel free to ask another question.