Pronunciation: /ɪkˈstɜrnələti/
noun a consequence of an industrial or commercial activity which affects other parties without this being reflected in the cost of the goods or services involved
A1 An externality is a consequence of an action that affects someone other than the person who took the action.
A2 In economics, an externality is a cost or benefit that affects a party who did not choose to incur that cost or benefit.
B1 When a factory pollutes a river, it creates a negative externality for the people living downstream.
B2 Governments often intervene in markets to correct for externalities, such as imposing taxes on pollution.
C1 The concept of externalities is a key consideration in environmental economics and public policy.
C2 Economists study externalities to understand how market failures can occur and how to address them through regulation or incentives.
formal The economic model takes into account the externalities associated with production.
informal When discussing pollution, we need to consider the externalities it creates.
slang Hey, did you think about the side effects of that decision? Those are the externalities.
figurative In life, every action we take has externalities that ripple out beyond ourselves.
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