Externalities

Victoria opens up a cinnamon bun bakery near the Food Court in the Galleria Mall. Customers love her delicious like-homemade cinnamon buns and she has a steady flow of revenue. Meanwhile, because the smell of delicious cinnamon buns fills the food court, more people realize - as they pass by - that they are hungry so they stop in the Food Court to buy a meal. Thus, sales in the Galleria Food Court rise significantly thanks to Victoria's cinnamon bun bakery.

Who is the buyer in the underlined passage?

• Victoria's cinnamon bun bakery

• customers of Victoria's cinnamon bun bakery

• passers-by of Victoria's cinnamon bun bakery

• neighboring restaurant owners of the Galleria Food Court

Victoria opens up a cinnamon bun bakery near the Food Court in the Galleria Mall. Customers love her delicious like-homemade cinnamon buns and she has a steady flow of revenue. Meanwhile, because the smell of delicious cinnamon buns fills the food court, more people realize - as they pass by - that they are hungry so they stop in the Food Court to buy a meal. Thus, sales in the Galleria Food Court rise significantly thanks to Victoria's cinnamon bun bakery.

Who is the seller in the underlined passage?

• Victoria's cinnamon bun bakery

• customers of Victoria's cinnamon bun bakery

• passers-by of Victoria's cinnamon bun bakery

• neighboring restaurant owners of the Galleria Food Court

Victoria opens up a cinnamon bun bakery near the Food Court in the Galleria Mall. Customers love her delicious like-homemade cinnamon buns and she has a steady flow of revenue. Meanwhile, because the smell of delicious cinnamon buns fills the food court, more people realize - as they pass by - that they are hungry so they stop in the Food Court to buy a meal. Thus, sales in the Galleria Food Court rise significantly thanks to Victoria's cinnamon bun bakery.

What third party financially benefits from the market transaction depicted in the underlined passage even though they do not pay any costs for it?

• Victoria's cinnamon bun bakery

• customers of Victoria's cinnamon bun bakery

• passers-by of Victoria's cinnamon bun bakery

• neighboring restaurant owners of the Galleria Food Court

Victoria opens up a cinnamon bun bakery near the Food Court in the Galleria Mall. Customers love her delicious like-homemade cinnamon buns and she has a steady flow of revenue. Meanwhile, because the smell of delicious cinnamon buns fills the food court, more people realize - as they pass by - that they are hungry so they stop in the Food Court to buy a meal. Thus, sales in the Galleria Food Court rise significantly thanks to Victoria's cinnamon bun bakery.

In the above scenario, both food court business owners and non-paying passers-by experience what from Victoria's business?

• Positive externality

• Negative externality

Social media content creators have figured out that content that makes people angry (about politics, race, religion, etc.) earns the most "likes" or "hearts" or "clicks" on social media. So, social media content creators - in hopes of earning revenue from advertisers - create more anger-causing material that is often completely disconnected from truth or facts. As a result, users of social media are becoming more and more angry, mentally unhealthy, and misinformed. Furthermore, even those who do not use social media are being affected by the political, racial, and religious tensions and divisions that social media is intensifying in the United States. This can be seen in the sharp rise of mass shootings, violent demonstrations, and suicide since the inception of social media.

Who is the buyer in the underlined passage?

• Social media content creators

• Advertisers

• Americans who view - but don't create - social media posts

• Americans who do not use social media

Social media content creators have figured out that content that makes people angry (about politics, race, religion, etc.) earns the most "likes" or "hearts" or "clicks" on social media. So, social media content creators - in hopes of earning revenue from advertisers - create more anger-causing material that is often completely disconnected from truth or facts. As a result, users of social media are becoming more and more angry, mentally unhealthy, and misinformed. Furthermore, even those who do not use social media are being affected by the political, racial, and religious tensions and divisions that social media is intensifying in the United States. This can be seen in the sharp rise of mass shootings, violent demonstrations, and suicide since the inception of social media.

Who is the seller in the underlined passage?

• Social media content creators

• Advertisers

• Americans who view - but don't create - social media posts

• Americans who do not use social media

Social media content creators have figured out that content that makes people angry (about politics, race, religion, etc.) earns the most "likes" or "hearts" or "clicks" on social media. So, social media content creators - in hopes of earning revenue from advertisers - create more anger-causing material that is often completely disconnected from truth or facts. As a result, users of social media are becoming more and more angry, mentally unhealthy, and misinformed. Furthermore, even those who do not use social media are being affected by the political, racial, and religious tensions and divisions that social media is intensifying in the United States. This can be seen in the sharp rise of mass shootings, violent demonstrations, and suicide since the inception of social media.

What third party is paying some of the costs for the market transaction depicted in the underlined passage?

• Social media content creators

• Advertisers

• Americans who view - but don't create - social media posts

• Americans who do not use social media

Social media content creators have figured out that content that makes people angry (about politics, race, religion, etc.) earns the most "likes" or "hearts" or "clicks" on social media. So, social media content creators - in hopes of earning revenue from advertisers - create more anger-causing material that is often completely disconnected from truth or facts. As a result, users of social media are becoming more and more angry, mentally unhealthy, and misinformed. Furthermore, even those who do not use social media are being affected by the political, racial, and religious tensions and divisions that social media is intensifying in the United States. This can be seen in the sharp rise of mass shootings, violent demonstrations, and suicide since the inception of social media.

In the above scenario, both Americans who view (but don't create) social media posts AND Americans who never use social media experience what as a result of the market exchange between social media content creators and advertisers?

• Positive Externalities

• Negative Externalities