Question

A toxic dumping site leaks into a local water supply and prompts a public outcry. The local and then the state government each take actions to clean up the site and to fine the company for damages. Which of the following would be a potential positive externality for the national environment?

A. More funds for pro-business political candidates

B. Increased funding for oceanic research efforts

C. Renewed interest among students in the humanities

D. Tighter federal oversight laws and restrictions

Answer 1

I'm pretty sure that the most suitable one is C. Renewed interest among students in the humanities

Answer 2

Answer: D. Tighter federal oversight laws and restrictions.

After an environmental tragedy like this occurs, the government tends to impose tighter laws and restrictions to ensure it does not happen again. This could be a positive externality for the national environment. It is unlikely that the situation will lead to more funds being given to pro-business political candidates, especially if they were involved in the accident in any way. Moreover, there is no obvious reason for the leak to lead to more oceanic research. Finally, the interest among students in the humanities will not necessarily improve as the incident has nothing to do with the humanities.