The impact of one person's actions on the wellbeing of a bystander is called:
A) competitive advantage
B) deadweight loss
C) market equilibrium
D) an externality

Question

Quizplus · Accepted Answer

An externality refers to the positive or negative effects that one person's actions can have on someone else's wellbeing. This can affect both individuals and the wider community, and can be either beneficial or harmful. Examples of externalities include pollution from a factory that affects the health of nearby residents, and the benefits to a community of someone quitting smoking.

The Impact of One Person's Actions on the Wellbeing of a Bystander