Which of the following would be an external cost in the market for cigarettes?
A) price of a pack of cigarettes
B) loss of income for the smoker resulting from extra missed days of work
C) higher life insurance premiums paid by the smoker due to smoking
D) loss in utility in smoking by the smoker because the smoker must stand outside her office building in the cold winter to smoke
E) increased risk of cancer to the nonsmoking passengers in the smoker's car pool

Question

Quizplus · Accepted Answer

Increased risk of cancer to the nonsmoking passengers in the smoker's car pool is an external cost because it affects individuals who are not part of the transaction (buying or selling cigarettes) and bears a cost without their consent.

Which of the Following Would Be an External Cost in the Market