Examlex
Which of the following is a disadvantage of the payback method?
Negative Externality
A cost that is suffered by a third party as a result of an economic transaction.
Pigovian Externality
A situation where a market activity imposes a positive or negative cost or benefit on a third-party that is not reflected in the market price.
Free-Rider Problem
A situation in a shared-resource system where individuals consume more than their fair share or pay less than their fair share of the cost.
Free-Rider Problem
A situation where individuals consume a public good without contributing to its cost, undermining the provision of that good.
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