Which of the following activities, if any, represents an external cost?
A)The benefits that accrue to society when an individual receives a college education.
B)The increase in property values of vacant lots in an area near where a new amusement park is constructed.
C)The pollination of apple trees that occurs when a beekeeper locates next door to an apple orchard.
D)None of the above

Question

Which of the following activities, if any, represents an external cost?
A)​The benefits that accrue to society when an individual receives a college education.
B)​The increase in property values of vacant lots in an area near where a new amusement park is constructed.
C)​The pollination of apple trees that occurs when a beekeeper locates next door to an apple orchard.
D)​None of the above

Quizplus · Accepted Answer

External costs, or negative externalities, are costs that are suffered by a third party as a result of an economic transaction. The options provided (A, B, C) all describe positive externalities or benefits, not costs, to third parties.

Which of the Following Activities, If Any, Represents an External