An example of an externality occurs when a chemical factory
A) overworks its employees.
B) produces fertilisers that kill plants rather than feed them.
C) produces fertilisers that do not help plants grow.
D) is producing ethanol and dumps waste in a river upstream from a popular fishing spot.

Question

Quizplus · Accepted Answer

An externality occurs when a third party is affected by the economic activities of others without their consent or compensation. In this case, dumping waste in a river affects the ecosystem and the people who fish there, making it an externality.

An Example of an Externality Occurs When a Chemical Factory