When a person throws a cigarette out of a car window and starts a brush fire, this is
A) an example of an external benefit.
B) an example of an external cost.
C) an example of a public good.
D) an example of market power.

Question

Quizplus · Accepted Answer

This is an example of an external cost, as the negative effects (the brush fire) are being imposed on others who are not responsible for the cigarette being thrown out of the car window.

When a Person Throws a Cigarette Out of a Car