📚 Learning Guide
Positive Externalities in Consumption
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A homeowner decides to plant a garden that produces beautiful flowers. This garden not only enhances the homeowner's property value but also provides enjoyment to neighbors walking by. Which category does this example best fit into regarding positive externalities in consumption?

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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

Marginal Private Benefit

B

Marginal Social Benefit

C

Negative Externality

D

Public Good

Understanding the Answer

Let's break down why this is correct

Answer

This example fits into the category of positive externalities in consumption because it shows how one person's actions can benefit others. When the homeowner plants a beautiful flower garden, it not only makes their own property look nicer but also creates a pleasant view for their neighbors and passersby. This enjoyment from the flowers is something that people can experience without directly paying for it, which is a key aspect of positive externalities. For instance, if someone walks by and admires the blooms, they feel happiness and appreciation, even though they didn’t contribute to the garden’s creation. Thus, the garden provides a shared benefit that enhances the community's overall well-being.

Detailed Explanation

The garden creates benefits for others, like neighbors who enjoy the view. Other options are incorrect because This option focuses on the benefits just for the homeowner; A negative externality means something harmful happens to others.

Key Concepts

Positive Externalities in Consumption
Marginal Social Benefits
Resource Allocation
Topic

Positive Externalities in Consumption

Difficulty

medium level question

Cognitive Level

understand

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