Final answer:
A cost/benefit that affects others besides the participants is called an external benefit or a positive externality. Opportunity cost is the cost of foregoing the next best alternative, and it plays a role in economic decisions like crime prevention. The free rider problem describes how some individuals benefit from resources without paying for them.
Step-by-step explanation:
A cost/benefit of an activity that impacts individuals other than those engaged in the activity can be referred to as an external benefit or positive externality. This occurs when the outcome of an activity provides unintended beneficial effects to a third party.
In economic terms, people or groups not directly involved in the purchase or direct use of a good or service benefit from the activity without having to pay for it. For example, the construction of a community pool benefits not only those who advocated for it and use it but also local businesses that might see increased foot traffic as a result. On the other hand, the opportunity cost is a related concept that refers to the cost of missing out on the next best alternative when making a decision. Considering crime prevention measures, improved economic conditions, which lower the opportunity cost of crime, can reduce crime rates by making legitimate work more financially attractive than criminal activities.
Another concept related to cost/benefit analysis is the free rider problem. This occurs when someone receives benefits from resources or services without contributing to the cost. An instance of this is listeners of National Public Radio who enjoy the programming without donating during fund-raisers, relying on others to cover the costs. Ultimately, the aim of economic analysis in decision-making, whether in matters related to crime, education, or environmental policy, is to ensure that actions are taken where the economic benefits outweigh the costs. When analyzing historical events such as exploration, one must consider the multiple perspectives of those who benefitted and those who bore the costs.