Economics GCSE
Externality
What Externality means in Economics GCSE, as defined for Pearson Edexcel.
Definition of Externality
A spillover effect of economic activity that imposes costs or creates benefits for third parties not directly involved in the transaction.
Topics that use Externality
- Externalities (Pearson Edexcel GCSE)
Related terms
Using Externality in the exam
Definition questions usually carry one or two marks, and examiners look for the precise wording. Write the definition from memory, check it against the version above, and then use the term in a longer answer on the same topic so it sticks.
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