📚 Learning Guide
Externalities in Economics
easy

Negative externalities : Pollution :: Positive externalities : ?

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Learning Path
Learning Path

Question & Answer
1
Understand Question
2
Review Options
3
Learn Explanation
4
Explore Topic

Choose the Best Answer

A

Education

B

Taxation

C

Subsidies

D

Regulation

Understanding the Answer

Let's break down why this is correct

Answer

Negative externalities, like pollution, occur when a company's actions harm others without compensating them. In contrast, positive externalities benefit others without the provider receiving payment. A good example of a positive externality is a well-kept garden in a neighborhood. When someone invests time and money into their garden, the surrounding community enjoys beautiful scenery and increased property values without having to pay for it. So, just as pollution negatively affects people nearby, a beautiful garden positively impacts everyone around it.

Detailed Explanation

Education creates benefits for everyone, not just the person learning. Other options are incorrect because Taxation is about collecting money for the government; Subsidies are payments to help businesses or people.

Key Concepts

Externalities
Government intervention
Social efficiency
Topic

Externalities in Economics

Difficulty

easy level question

Cognitive Level

understand

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