Barking dogs cannot be considered an externality because externalities must be associated with some form of market exchange.

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Jimmy Coleman · Accepted Answer

Final Answer : False, Explanation :  Externalities are not limited to market exchanges; they refer to the costs or benefits that affect a party who did not choose to incur that cost or benefit. Barking dogs can be considered a negative externality as they may cause disturbance or discomfort to neighbors without any market transaction involved.

Barking dogs cannot be considered an externality because externalities must be associated with some form of market exchange.

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