External costs are those costs:
A) that fall directly on an economic decision maker.
B) that fall indirectly on an economic decision maker.
C) that are imposed without compensation on someone other than the person who caused them.
D) that are both social costs and private costs.

Question

Quizplus · Accepted Answer

External costs are costs that are imposed on someone other than the person who caused them, without any compensation. They are also known as negative externalities because they are a cost to society as a whole that is not accounted for by those who create them. Choices A, B, and D do not fully capture the concept of external costs.

External Costs Are Those Costs