Which of the following is an example of an externality?
A) Aaron purchases a new flat screen television.
B) Bonnie cannot catch the flu from Bobby because Bobby got a flu vaccine.
C) Clyde sells a book to Cathy.
D) Doug turns up the heat in his apartment.

Question

Quizplus · Accepted Answer

An externality is a cost or benefit for a third party who did not agree to it. In this case, Bonnie benefits from Bobby's flu vaccine, which is a positive externality.

Which of the Following Is an Example of an Externality