Question

When local fishermen are affected by the dumping of toxic waste into the local river by a factory, we call this ?

1- external costs
2- total welfare
3-external benefits
5- social benefits

Please helpp!!

Answer 1

Answer: External cost

Step-by-step explanation:

External cost is a negative externality that occurs when the action of an economic agent results into a negative effect on a third party that wasn't involved in the transaction.

Here, the local fishermen being affected by the dumping of toxic waste into the local river by a factory, shows an external cost. The production activities of the firm resulted in the spillover effect.