In economics, a harm that is not borne by the person or persons who caused it is known as a(n)
A) externality.
B) inefficiency
C) Pareto improvement.
D) marginal loss.

Question

Quizplus · Accepted Answer

An externality is a cost or benefit that affects a third party who did not choose to incur that cost or benefit. It is a type of market failure where the price of a good or service does not reflect all of its costs or benefits. Therefore, choice A is the correct answer. The other choices do not accurately describe a harm that is not borne by the person or persons who caused it.

In Economics, a Harm That Is Not Borne by the Person