Joe fixes cars in his driveway to earn his income. He works late at night and makes so much noise that Moe, his neighbor across the street, cannot sleep. Joe:

Name: Joe fixes cars in his driveway to earn his income. He works late at night and makes so much noise that Moe, his neighbor across the street, cannot sleep. Joe:
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Question

Quizplus · Accepted Answer

Joe is imposing an external cost on Moe because his actions (making noise) negatively affect Moe's ability to sleep, which is a cost not reflected in Joe's income or expenses.

Joe Fixes Cars in His Driveway to Earn His Income