It is true that an externality is a benefit or cost associated with an activity that accrues to some third party who is not a direct participant in the activity.
Given that an externality is a benefit or cost associated with an activity that accrues to some third party who is not a direct participant in the activity.
We are required to say whether the statement is true or false.
The statement that an externality is a benefit or cost associated with an activity that accrues to some third party who is not a direct participant in the activity is absolutely true.
An externality is basically a cost or benefit caused by a producer that is not financially incurred or received by that producer.
Hence it is true that an externality is a benefit or cost associated with an activity that accrues to some third party who is not a direct participant in the activity.
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