Economic agents who generate externality are distinct from those who experience them.

Example: one fisher catches juvenile fish that do not mature and are otherwise caught by another fisher in another location.

O True

O False

The answer is true.

Explanation:

Externalities can be described as affects that impact on the external parties as a result of the economic activities of a party. These could be positive or negative depending on the way they effect.

Also, externalities can be Symmetric or assymetric. In Symmetric affect, the impact of the economic agent can affect the agent itself while in asymmetric affect, the economic agent is not affected by its own influence.

The statement is: True.

Explanation:

Externalities are described as the effect of the actions of one party that influence directly in other individuals even if those other individuals have nothing to do in the operations of the first party. Externalities can be positive when they benefit the uninvolved individuals or negative when the externality affects them.

There are several types of externalities such as technological, pecuniary, symmetric, asymmetric, transferable, depletable, non-depletable and transnational.

Asymmetric externalities are those where the party causing the externality is not affected by its actions. It opposes symetric externalities which are those where the economic agent is directly affected by its own actions.