Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A homeowner plants a garden that beautifies the neighborhood.
B
A factory emits pollution that affects nearby residents.
C
A restaurant's waste management causes increased traffic congestion.
D
A taxi service charges high prices during peak hours.
Understanding the Answer
Let's break down why this is correct
Answer
A positive externality happens when one person’s action benefits others without a direct payment. For example, when a person gets vaccinated, they protect not only themselves but also people around them who are less likely to catch the disease. The extra safety that everyone enjoys is a benefit that the vaccinated person does not directly receive. Thus, vaccination is a clear illustration of a positive externality.
Detailed Explanation
When the homeowner plants a garden, it looks nicer for everyone nearby. Other options are incorrect because The factory emits pollution that harms people; Restaurant waste causing traffic congestion is a negative externality.
Key Concepts
Externalities
Social Optimum
Market Efficiency
Topic
Externalities and Social Optimum
Difficulty
easy level question
Cognitive Level
understand
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