Question

A livestock ranch decides to expand its operations. Which of the following would be a negative externality for the local environment? higher property taxes less land for development less use of renewable resources more groundwater pollutiom

Answer 1

If a livestock ranch decides to expand its operations "less land for development" would be a possible negative externality, since people would have a smaller amount of land to work with. 

Answer 2

The externality is a microeconomic concept that refers to the impact of a given economic activity on other groups that are not involved with that economic activity.

Alternative B does not seem to be exactly an externality, but an opportunity cost. If agricultural activity is extended, other activities are no longer implemented.

The alternative that seems correct is the fourth (D). Assuming that agricultural activity actually increases the pollution of groundwater, it would certainly be an externality, since pollution would harm the environment and people who are not involved in agricultural activity.