Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
The trees provide shade and beauty that enhance the neighborhood's appeal
B
The homeowner sells the trees to neighbors, increasing their value
C
The trees create competition among homeowners for property sales
D
Neighbors are forced to plant trees to match the homeowner's investment
Understanding the Answer
Let's break down why this is correct
Answer
A positive externality occurs when an action taken by one person or group benefits others without those others paying for it. In this case, when a homeowner plants trees, the surrounding community enjoys several benefits, such as improved air quality, increased beauty, and even cooler temperatures in the area. These trees can make the neighborhood more attractive, which can lead to higher property values for everyone nearby. For example, if one homeowner plants a beautiful garden with trees, their neighbors may see their homes becoming more desirable to potential buyers, leading to an increase in property values. This shows how individual actions can have a positive impact on the larger community, even if those who benefit did not contribute to the initial effort.
Detailed Explanation
The trees make the area look nicer and provide shade. Other options are incorrect because This suggests the homeowner is making money by selling trees; This option implies that competition drives up prices.
Key Concepts
Positive externalities in consumption
Marginal social benefits
Subsidies for environmental goods
Topic
Positive Externalities in Consumption
Difficulty
easy level question
Cognitive Level
understand
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