Which of the following is an example of an externality?
A)cigarette smoke that permeates an entire restaurant
B)a flu shot that prevents a student from transmitting the virus
C)a beautiful flower garden outside the county courthouse
D)All of the above are examples of externalities.

Question

Which of the following is an example of an externality?
A)​cigarette smoke that permeates an entire restaurant
B)​a flu shot that prevents a student from transmitting the virus
C)​a beautiful flower garden outside the county courthouse
D)​All of the above are examples of externalities.

Quizplus · Accepted Answer

All the options listed are examples of externalities because they involve a third party either benefiting from or being harmed by an action without being involved in the action or transaction. Cigarette smoke affects non-smokers, a flu shot can prevent others from getting sick (a positive externality), and a beautiful garden provides enjoyment to those who see it without them necessarily contributing to its upkeep.

Which of the Following Is an Example of an Externality