📚 Learning Guide
Positive Externalities in Consumption
easy

When individuals consume a good that generates positive externalities, such as planting trees, the benefits to society are greater than the __________ they receive from the good.

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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 benefits

B

social costs

C

external benefits

D

market prices

Understanding the Answer

Let's break down why this is correct

Answer

When individuals plant trees, they create benefits that go beyond just what they gain personally. The trees not only provide shade and beauty for the person who planted them but also improve air quality, provide homes for wildlife, and enhance the environment for everyone. This means that the overall advantages to society, like cleaner air and a healthier ecosystem, are greater than the direct benefits the tree planter receives. For example, if a person plants a tree in their yard, they enjoy the shade it provides, but the tree also helps reduce pollution and gives birds a place to live, benefiting the entire neighborhood. Therefore, the positive effects of planting trees extend far beyond the individual, highlighting the importance of considering community benefits in our actions.

Detailed Explanation

Private benefits are what individuals gain for themselves. Other options are incorrect because Social costs are the negative effects on society; External benefits are the good effects on others.

Key Concepts

Positive Externalities in Consumption
Marginal Private Benefits vs. Marginal Social Benefits
Government Interventions
Topic

Positive Externalities in Consumption

Difficulty

easy level question

Cognitive Level

understand

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