alleryStart learning →Because they affect parties beyond those involved, externalities are sometimes called:
ASubsidies
BSpillovers
CSurpluses
DShortages
Answer & Solution
Correct answer: B. Spillovers
1. Externalities have a second, more everyday name.
2. Externalities occur in market transactions.
3. They affect other parties beyond those involved in the transaction.
4. For that reason they are sometimes called spillovers.
_Source: OpenStax Principles of Microeconomics for AP Courses 2e (CC BY 4.0), Ch 12 'Environmental Protection and Negative Externalities'_
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