NONEXTERNALITY Meaning and
Definition
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Nonexternality is a concept used in economics to describe a situation in which the actions of an individual or firm do not have any impact on the well-being or utility of others in society. It refers to a lack of external effects caused by a specific economic activity or decision. In other words, it is the absence of positive or negative externalities resulting from an economic transaction.
Externalities occur when the actions of one economic agent have unintended consequences on others who are not directly involved in the transaction. These external effects can either be positive, resulting in a benefit to others, or negative, leading to harm or costs. Nonexternality implies that the actions being considered do not produce any such side effects on third parties.
Nonexternality is a desirable characteristic of economic transactions from a social welfare perspective, as it indicates that the costs and benefits of an activity are all borne and enjoyed by the parties directly involved. It implies that the market outcome is efficient, as there is no inefficiency caused by spillover effects or uncompensated external costs or benefits.
Overall, nonexternality represents a state in which the decisions or actions of individuals or firms do not impose costs or confer benefits on society beyond those directly involved, resulting in a balanced and efficient allocation of resources.
Common Misspellings for NONEXTERNALITY
- bonexternality
- monexternality
- jonexternality
- honexternality
- ninexternality
- nknexternality
- nlnexternality
- npnexternality
- n0nexternality
- n9nexternality
- nobexternality
- nomexternality
- nojexternality
- nohexternality
- nonwxternality
- nonsxternality
- nondxternality
- nonrxternality
- non4xternality
- non3xternality
Etymology of NONEXTERNALITY
The word "nonexternality" is a compound word that combines the prefix "non-" and the noun "externality".
The prefix "non-" is derived from the Latin word "non", which means "not". It is commonly used to indicate negation or absence of something.
The noun "externality" is derived from the Latin word "externus", meaning "external". An externality refers to the impact or effect of an economic activity on individuals or entities who are not directly involved in that activity and whose interests and welfare may be affected.
Therefore, the etymology of "nonexternality" indicates the absence or negation of an externality, suggesting that it refers to a situation where there is no external impact or effect from an economic activity.
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