Which statement BEST describes a negative externality?
A) Your neighbour loves to bake bread and always brings you a loaf fresh and hot from the oven.
B) Your neighbour has an ornamental pond that breeds mosquitoes.
C) Your neighbour has invested in beautiful landscaping,increasing the value of all of the houses on the block.
D) Your neighbour has a pool and has given you an open invitation to come over and swim.

Question

Quizplus · Accepted Answer

A negative externality is an activity that imposes a cost on someone who is not involved in the activity. In this case, your neighbour's ornamental pond breeds mosquitoes, which is a nuisance to you and others in the neighbourhood.

Which Statement BEST Describes a Negative Externality