Question

Externalities are ____ affects spillover always negative intended

Answer 1

Question: Externalities are _____ effects

spillover

always negative

intended

Answer:

spillover

Explanation:

externalities occur when transaction between buyer and seller affect a third party who isn't directly involved in the exchange. In other words the third party did not choose to incur this cost. This could be positive or negative and is also termed spillover. for example manufacturing activities that cost third parties health costs are a good example. government usually impose taxes on externalities such as this