CAF-7 · Chapter 7 · Question 8 of 15
A textile manufacturer discharges untreated chemical dye into a local river, heavily polluting the water supply of a nearby village. In sustainability terms, this negative environmental impact caused by the business's operations is referred to as:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A negative externality
Explanation
A negative externality is a cost that is suffered by a third party (the village) as a result of an economic transaction or operational activity by a business (the factory) that does not pay for that cost.
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