Which of the following could give rise to a negative externality?

• A. A student studying quietly in the library
• B. A company providing free vaccinations to the public
• C. A factory emitting pollution into the air
• D. A homeowner planting flowers in their front yard

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of a negative externality. A negative externality occurs when an economic activity imposes a cost on third parties who are not involved in the activity, without compensation.
2. Step 2: Analyze each option to see if it imposes an unintended cost on others. For example, a student studying quietly in the library generally does not harm others, so it is unlikely to create a negative externality.
3. Step 3: Consider the company providing free vaccinations. This activity typically benefits others by improving public health, so it is more likely to create a positive externality rather than a negative one.
4. Step 4: Examine the factory emitting pollution. Pollution is a classic example of a negative externality because it imposes health and environmental costs on people who are not part of the factory's production process.
5. Step 5: Look at the homeowner planting flowers. This activity usually has positive or neutral effects on neighbors and the community, so it does not create a negative externality.