Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
They reduce the overall demand in the market.
B
They create benefits for third parties, leading to greater overall welfare.
C
They increase the prices of goods, making them less accessible.
D
They have no impact on consumer behavior.
Understanding the Answer
Let's break down why this is correct
Answer
Positive externalities in consumption happen when someone benefits from a good or service without directly paying for it. For example, when a person gets vaccinated, they not only protect themselves from disease but also help reduce the spread of illness in the community. This means that others enjoy better health without having to pay for the vaccination themselves. When many people get vaccinated, the overall health of the community improves, leading to lower healthcare costs and increased productivity. Therefore, encouraging consumption of goods with positive externalities can lead to greater economic efficiency by maximizing the benefits for everyone involved.
Detailed Explanation
When people enjoy a good, like education, others benefit too. Other options are incorrect because Some might think that positive effects lower demand; It's a common belief that benefits raise prices.
Key Concepts
consumer behavior
economic efficiency
Topic
Positive Externalities in Consumption
Difficulty
medium level question
Cognitive Level
understand
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