An external cost is created when you
A)graduate from university.
B)buy flowers for your mother on Mother's Day.
C)litter on the side of the road.
D)buy a sandwich for lunch.

Question

Quizplus · Accepted Answer

Littering on the side of the road creates an external cost because it imposes a cost on society as a whole, such as harm to the environment and increased municipal expenses for cleanup.

Answer: D 
 Buying a sandwich for lunch does not create an external cost because it is a private transaction between the buyer and the seller, and there are no negative impacts on society as a whole.

An External Cost Is Created When You