Negative externalities:
a. are found only in large cities.
b. occur whenever individual health is harmed in the production process.
c. impose most of their costs directly on consumers of polluting processes.
d. impose most of their costs on individuals other than consumers of the polluting product.
Question 2
Banks help to overcome the problem of asymmetric information by:
a. lending to a single rich borrower and not diversifying their portfolio.
b. acquiring expertise in evaluating the credit histories of borrowers.
c. threatening borrowers.
d. offering only one type of loan.
e. providing information to lenders.
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