Identifying and Defining the Problem Includes a Discussion of Who

question 78

True/False

Identifying and defining the problem includes a discussion of who is harmed by the problem, and when the harmful effects occur.

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Definitions:

Externality

An economic effect of a transaction that affects third parties who did not choose to be involved in the transaction.

Externality

An externality is a cost or benefit caused by a producer that is not financially incurred or received by that producer.

Market Exchange

The process through which goods, services, or assets are traded between buyers and sellers at a determined price.

Negative Externalities

Unintended and unfavourable outcomes of an activity or transaction that affect third-party stakeholders who did not choose to be involved in that activity.