Externalities are:
A) always good.
B) always bad.
C) sometimes good and sometimes bad.
D) neither good nor bad.

Question

Quizplus · Accepted Answer

Externalities can have both positive and negative impacts, depending on the situation. For example, a new park built in a neighborhood can increase property values (positive externality) but also increase noise levels and traffic (negative externality). Similarly, the pollution caused by a factory can have negative impacts on nearby communities but may also provide jobs and economic benefits (positive externality for some). Therefore, externalities are not always good or bad, but the impacts depend on various factors.

Externalities Are