The term externalities refers to
A)Black-market economic activity.
B)The impact on markets of imported goods.
C)The costs or benefits of a market activity borne by a third party.
D)The inequitable distribution of income.

Question

Quizplus · Accepted Answer

Externalities refer to the costs or benefits of a market activity that are felt by a third party who did not choose to incur those costs or receive those benefits. For example, pollution from a factory may harm the health of nearby residents, who do not themselves work at the factory and did not choose to live near it. The cost of pollution is an externality, borne by the third party residents rather than the factory or the consumers of its products.

The Term Externalities Refers to