An externality is:
A)an activity that imposes involuntary costs or benefits on others, or an activity whose effects are not completely reflected in its market price.
B)an activity that does not impose involuntary costs or benefits on other, or an activity whose effects are completely reflected in its market price.
C)is not a consideration in economics.
D)none of the above.

Question

Quizplus · Accepted Answer

An externality is an activity that imposes involuntary costs or benefits on others, or an activity whose effects are not completely reflected in its market price. It is an important concept in economics as it can lead to market inefficiencies and the need for government intervention to address the external costs or benefits. Option B is not correct as an externality does impose costs or benefits on others, and its effects are not completely reflected in the market price. Option C is not correct as externalities are an important consideration in economics. Option D is not correct.

An Externality Is