Question

Which of the following is an externality associated with an individual's decision to play loud music in his/her apartment? The individual's ear drums might suffer long-term damage. The individual's stereo speakers might break, in which case he/she would have to pay to fix them or purchase new ones. The music could disturb the neighbors, who might want to sleep or work. All of the above are externalities. None of the above is an externality

Answer 1

Answer is option C)

Since externality is created one individual's affect the unrelated third party

Since in first two options, the loud music hurts or damages the individual himself, so no externality.

Only in option c, the neighbours affected , due to loud music , hence damage to the third party., So negative externality