An aluminium smelting plant installs an advanced emissions-scrubbing system that reduces its annual carbon tax liability by £120,000\pounds 120,000£120,000. This upgrade also reduces local airborne particulates, resulting in fewer respiratory hospital admissions in the surrounding community, valued at £85,000 \pounds 85,000\,£85,000 per year.
The £85,000 \pounds 85,000\,£85,000 reduction in healthcare-related costs for the local community is an example of an:
external cost
social cost
private benefit
external benefit
54 exam-style questions on Edexcel A A Level Economics 1.3.2 Externalities. Each one has a worked solution and a mark scheme showing where the marks go.