A situation in which the costs of producing or the benefits of consuming a good spill over onto those who are neither producing nor consuming the good is called a(n)

Question

Quizplus · Accepted Answer

An externality is a situation where the costs or benefits of an economic activity spill over onto third parties who are not directly involved in the activity. For example, pollution from a factory affects not just the workers and owners of the factory, but also neighboring communities and ecosystems. Therefore, the correct answer is D - externality.

A Situation in Which the Costs of Producing or the Benefits