Question

An externality is a. an economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume. b. the total cost to society of producing an additional unit of a good or service. c. the amount a consumer pays to consume an additional amount of any particular good. d. a situation in which the market, on its own, does not distribute resources efficiently.

Answer 1

Externality An economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume. When the production or consumption of a good or service has an effect upon a third party. Failure of the market to achieve a social optimum where MSB = MSC The answer is a)produce or consume

Answer 2

Its gotta be A. don't know why the top answer is rated 1 star tho?