Unintended costs that are imposed on third parties as a result of an economic activity are called:
A) marginal costs.
B) direct costs.
C) negative externalities.
D) positive externalities.

Question

Quizplus · Accepted Answer

Negative externalities refer to the costs that are imposed on third parties as a result of economic activities, such as pollution or traffic congestion. Marginal costs are the additional costs incurred while producing an extra unit of output, while direct costs refer to the expenses that are directly associated with a particular activity. Positive externalities, on the other hand, refer to the benefits that are enjoyed by third parties as a result of economic activities, such as the increase in property values due to the construction of a new park.

Unintended Costs That Are Imposed on Third Parties as a Result