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Environmental Externalities
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What is an environmental externality?
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A
A cost or benefit that is imposed on a third party as a result of an economic transaction.
💡 Explanation:
An environmental externality is a cost or benefit that is imposed on a third party as a result of an economic transaction. For example, when a factory pollutes the air, it imposes a cost on people who live nearby in the form of health problems. This cost is an environmental externality.