Externalities
A) are important in the areas of environment and education.
B) only have a negative impact on people.
C) deal with issues that are not our internal issues.
D) affect the people who are responsible for production.
E) are nonexistent in unregulated, competitive markets.

Question

Quizplus · Accepted Answer

Externalities refer to the effects of a transaction or activity on a third party who is not directly involved. Environmental externalities include pollution and damage to natural resources, while education externalities can include the benefits to society from an educated population. Therefore, externalities are important in the areas of environment and education.