Sort the scenarios below according to whether or not they describe a negative externality.

 

An example of a negative externality A donut shop emits a delicious smell into the air as a by-product of production. A factory emits pollution into the atmosphere as a by-product of production. A neighbor plays loud music that annoys the surrounding community. Not an example of a negative externality A person who lives alone buys a DVD, but finds the movie unenjoyable A person gets a flu-shot and is therefore less likely to spread illness to others. A person smokes a cigarette and imposes secondhand smoke on others. A person with no allergies that gets a mosquito bite from a disease-free mosquito