Question

a market failure occurs when there are additional costs associated with production of a good that are not reflected in the market price. these are called negative or harmful spillovers. what is an example of negative or harmful spillover? a medical care for pregnant teenagers. b speed traps for high fatality areas. c education in a poverty stricken area. d pollution of a river from an electrical plant.

Explanation:

A negative spillover (negative externality) is a cost imposed on third parties not involved in a transaction. Let's analyze each option:

• Option A: Medical care for pregnant teenagers is a positive or beneficial service, not a negative spillover.
• Option B: Speed traps are a regulatory measure, not a spillover from production/consumption.
• Option C: Education in a poverty - stricken area is a positive externality (beneficial spillover), not negative.
• Option D: Pollution from an electrical plant is a cost (harm) imposed on others (e.g., people using the river, ecosystems) who are not part of the plant's production decision - making, fitting the definition of a negative spillover.

Answer:

D. Pollution of a river from an electrical plant.