Questions: Question 6(Multiple Choice Worth 4 points) (02.07 MC) Which of the following would most likely constitute a negative externality affecting free resources? Groundwater pollution Lower property taxes Higher property values New economic development Question 7 (Multiple Choice Worth 4 points) (02.07 MC)

The answer is Groundwater pollution.

Groundwater pollution is a classic example of a negative externality. It occurs when the actions of individuals or companies contaminate water sources, affecting others who rely on that water. This pollution imposes costs on society, such as health risks and the need for water treatment, without the polluter necessarily bearing those costs.

Lower property taxes are generally considered a positive financial benefit for property owners and do not typically constitute a negative externality. They do not impose additional costs on others in the way that pollution does.

Higher property values are usually seen as a positive outcome for property owners and the local economy. They do not represent a negative externality, as they do not impose costs on others.

New economic development can have both positive and negative externalities, but it is not inherently a negative externality. It can lead to job creation and increased economic activity, although it might also lead to issues like congestion or environmental degradation. However, it is not as directly associated with negative externalities as groundwater pollution.