An Externality Is Defined as

question 36

Multiple Choice

An externality is defined as

• A)the revenue generated by a firm in the external market
• B)a byproduct of a good or activity that affects someone not immediately involved in the transaction
• C)an additional cost of consumption that is borne by a third party
• D)a cost or benefit arising from price changes
• E)the value of a good or service to a consumer

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Definitions:

Smoking-Related Deaths

Deaths that can be directly attributed to smoking, including diseases such as lung cancer, chronic obstructive pulmonary disease (COPD), and heart disease.

Relative Risk

The risk a person has for a particular disease compared with the risk of other people who do not have that person’s condition or lifestyle.

Nonsmokers

Individuals who do not smoke cigarettes and are not exposed to the habit of inhaling smoke from combustible tobacco products.

Positive Reinforcer

A stimulus which, when presented after a behavior, increases the likelihood of that behavior being repeated.