Question

What is an externality?

a- a shared good or service for which it would be impractical to make consumers pay individually and to exclude nonpayers
b- someone who wouldn't choose to pay for a certain good or service but who'd get the benefits of it anyway if provided as a public good
c- a side effect of a good or service generating benefits or costs to someone who doesn't decide how much to produce or consume
d- someone who would choose to pay for a certain good or service but does not get the benefits of it if provided as a public good

Answer 1

The answer is C. A side effect of a good or service generating benefits or costs to someone who doesn't decide how much to produce or consume

Answer 2

C is the correct option.

Step-by-step explanation:

This refers to the coast and benefits incurred or received by a third party. Although that third party has no control over cost or benefits. It can be both negative and positive and can be caused due to the production and consumption of goods and services. It can be both private and social. The harmful gases emitted by a factory that affects the people living in the surrounding area is a case of the negative externality.