Paper 1 · externalities
In dam construction, which one is an externality?
Adam wall holding the water
Bearthmoving equipment used
Cirrigation piping at site
Dwater skiing facility in the area
Explanation: An externality is a cost or benefit that falls on third parties not directly involved in the construction. A water skiing facility in the area is an external benefit (positive externality) generated by the dam.
ZIMSEC Economics Paper 1, November 2009, Q3
