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Suppose Frank likes to snack on sugary candy. Frank knows that its bad for his teeth to eat sugary candy, but he doesnt car
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Answer #1

Answer: 2nd option

This is not an externality – neither positive nor negative.

In order to establish an externality, a third party or person must be affected; suppose smoking of cigarette affects others who inhale unconsciously; this is a negative externality.

But, in this case no one is affected except the one who is consuming candy. Therefore, this is not an externality.

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