📚 Learning Guide
Positive Externalities in Consumption
medium

Positive externalities in consumption are to social benefits as negative externalities in production are to what?

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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

Private costs

B

Social costs

C

Individual benefits

D

Market prices

Understanding the Answer

Let's break down why this is correct

Answer

Positive externalities in consumption occur when someone enjoys a benefit from a good or service that they did not directly pay for, leading to social benefits for everyone. For example, if someone gets vaccinated, they not only protect themselves but also help prevent the spread of disease, benefiting the entire community. On the other hand, negative externalities in production happen when a company produces goods in a way that harms others, like polluting the air or water. This leads to social costs, which are the harmful effects experienced by society as a whole, such as health problems or environmental damage. So, just as positive externalities in consumption create social benefits, negative externalities in production create social costs.

Detailed Explanation

Negative externalities in production create social costs. Other options are incorrect because Private costs are what a company pays for itself; Individual benefits focus on what one person gains.

Key Concepts

Positive externalities in consumption
Negative externalities in production
Social welfare
Topic

Positive Externalities in Consumption

Difficulty

medium level question

Cognitive Level

understand

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