An economic activity in which benefits or costs affect third parties is called
A) a public good.
B) a third-party good.
C) the exclusion principle.
D) an externality.

Question

Quizplus · Accepted Answer

An economic activity in which benefits or costs affect third parties is called an externality. This means that the activity generates benefits or costs that are not directly reflected in the market price paid by the buyer or seller, but rather spill over to affect others who are not directly involved in the transaction. Examples of externalities include pollution, traffic congestion, and noise.

An Economic Activity in Which Benefits or Costs Affect Third