Which one of the following is an example of an externality cost?
A)the cost of labor
B)the cost of materials to produce a product
C)the cost of operating a manufacturing plant
D)the cost of restoring contaminated and barren land

Question

Quizplus · Accepted Answer

Externality costs are costs that are not borne by the parties involved in a transaction but are imposed on others. The cost of restoring contaminated and barren land is an example of an environmental externality, where the negative impacts of pollution or land degradation affect third parties not directly involved in the production or consumption of goods.

Which One of the Following Is an Example of an Externality