Scenario: Vacant Houses, Foreclosed or Abandoned, Are Typically Boarded Up

Multiple Choice

Scenario: Vacant houses, foreclosed or abandoned, are typically boarded up with plywood that many people consider unsightly and likely to invite vandalism. An alternative is clear plastic (polycarbonate) panels. The figure below shows the demand and the supply of polycarbonate panels used for boarding up houses in a hypothetical town. To answer some of the questions below, it will be useful to find the equations of the three lines in the figure.

-Refer to the scenario above.Use of polycarbonate panels to board up vacant houses has a ________.

A) negative externality
B) positive externality
C) gain in producer surplus
D) gain in consumer surplus