An Externality Is Defined as

question 204

Multiple Choice

An externality is defined as

• A)an opportunity cost that is not considered, which causes inefficiency.
• B)a social cost that affects parties external to a transaction.
• C)a transaction which imposes a loss on one of the parties involved.
• D)a "cost of doing business" that cannot be allocated to any particular good.
• E)the increase in cost associated with increased production.

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Definitions:

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