Externalities occur when there is a lack of

Question

Quizplus · Accepted Answer

Externalities occur when one party's actions have an impact on a third party without the third party's consent. This can happen when property rights are not well-defined or enforced, allowing individuals to engage in activities that harm others without being held accountable. Without clear property rights, there is no incentive for individuals to consider the costs of their actions on third parties, leading to negative externalities. Government regulation can address this issue, but it is not the only solution.

Externalities Occur When There Is a Lack of