Externality

C1 16+

Pronunciation: /ɪkˈstɜrnələti/

Definitions of externality

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

Example Sentences

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.

Examples of externality in a Sentence

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.

Grammatical Forms of externality

past tense

externalized

plural

externalities

comparative

more external

superlative

most external

present tense

externalizes

future tense

will externalize

perfect tense

have externalized

continuous tense

is externalizing

singular

externality

positive degree

external

infinitive

externalize

gerund

externalizing

participle

externalized

Origin and Evolution of externality

First Known Use: 1875 year
Language of Origin: Latin
Story behind the word: The word 'externality' originated from the Latin word 'externus', meaning external or outside.
Evolution of the word: Originally used in economics to describe the impact of a transaction on a third party not directly involved, the term 'externality' has since been adopted in various fields such as environmental studies, sociology, and public policy to refer to unintended consequences or side effects of actions.