Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose 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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