Which of the following is an example of an externality?

Question

Quizplus · Accepted Answer

An externality is a cost or benefit that affects someone who is not directly involved in the production or consumption of a good or service. The cost of environmental damage is an example of a negative externality, where the cost is borne by society as a whole rather than by the producer or consumer. The other choices are not examples of externalities, as they are directly related to the production or consumption of the good or service.

Which of the Following Is an Example of an Externality