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Homework answers / question archive / You run a large company in Omaha, the location of your corporate headquarters
You run a large company in Omaha, the location of your corporate headquarters. The Omaha facility employs 2,000 people. You decide to move the headquarters to Dallas which results in 1,500 of your Omaha employees losing their jobs. In addition, the housing market is suppressed and housing prices fall. This is an example of: O A within firm positive externality O A positive environmental externality A within firm negative externality A negative environmental externality You are an actor and have a leading role in a feature film. You also own a clothing line. You win an Academy Award for your film and your clothing line sales increase. This is an example of: O A within firm negative externality A positive environmental externality O A within firm positive externality
Solution 1:
OPtion 4 is correct as by shifting of office from one place to another will lead to loss of job of employees and the housing market is falling is an external factor and firm does not have any control over it
Option 1 is incorrect because its not a positive impact of externality
Option 2 is incorrect because its not a positive externality factor as it the employees who lost job would not get job easily.
option 3 is incorrect beacuse its not an internal matter of the firm, the fall of housing maket is an external factor to the firm
Solution 2
OPtion 3 is correct as the actor is the sole person reason for the succes of his clothing business. His brand image is the main centre of attraction for his business and acting career.
Option 1 is incorrect as its not a negative externality
Option 2 is incorrect as its not the external factor to his clothing business.
