Externalities get their name from the fact that they are
A) of no value
B) valued above the market price
C) short lived
D) outcomes created by markets that take no account of these outcomes
E) outcomes created by markets that take these outcomes into account

Question

Quizplus · Accepted Answer

Externalities are called so because they are outcomes (either costs or benefits) created by a market activity that affect third parties who did not choose to incur that cost or benefit. The market does not account for these outcomes in its pricing or operations, hence the term "externalities."

Externalities Get Their Name from the Fact That They Are