An Externality Is Said to Exist When

Multiple Choice

An externality is said to exist when:

A) the side effect of an activity affects bystanders whose interests aren't taken into account.
B) the side effect of an activity affects bystanders , and the market provides incentives to take these affects into account.
C) individual actions are affected by external forces like the loss of U.S. jobs because of competition from abroad.
D) individual actions are affected by government policies (such as taxes) that are externally imposed on the market.