The exponential rise of generative AI has led to an unprecedented expansion of hyperscale data centres. While tech companies and consumers benefit from rapid, low-cost processing power, the operation of these facilities generates significant external costs (line 4) such as local water table depletion due to cooling systems and massive carbon dioxide emissions from non-renewable energy grids, neither of which are reflected in the prices charged to end-users.
Define the term 'external cost' as referred to in Extract B (line 4).
378 exam-style questions on AQA A Level Economics 1.8 The market mechanism, market failure and government intervention in markets, covering 1.8.1 How markets and prices allocate resources, 1.8.2 The meaning of market failure, 1.8.3 Public goods, private goods and quasi-public goods, 1.8.4 Positive and negative externalities in consumption and production, 1.8.5 Merit and demerit goods, 1.8.6 Market imperfections, 1.8.7 Competition policy (A-level only), 1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only), 1.8.9 Government intervention in markets, and 1.8.10 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.