An externality is the uncompensated impact of
A)society's decisions on the well-being of society.
B)a person's actions on that person's well-being.
C)one person's actions on the well-being of a bystander.
D)society's decisions on the poorest person in the society.

Question

Quizplus · Accepted Answer

An externality occurs when the actions of an individual or firm affect the well-being of a bystander who is not compensated for this effect. This can be either positive or negative, such as pollution (negative externality) or education (positive externality).

An Externality Is the Uncompensated Impact of