When an economic agent affects the well being of another, for better or worse, the agent is:
A)imposing an externality.
B)learning from the other agent.
C)using noneconomic analysis.
D)acting as a psychologist.

Question

Quizplus · Accepted Answer

An externality occurs when an economic agent's actions affect the well-being of another party, either positively or negatively, without any compensation being paid. The other choices do not accurately describe this scenario.

When an Economic Agent Affects the Well Being of Another