Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A student receives a scholarship for college, benefiting only themselves.
B
A community invests in public parks, improving local property values and community health.
C
A person buys a new car, which reduces their commuting time but increases traffic congestion.
D
A company trains its employees, increasing productivity but not affecting the local economy.
Understanding the Answer
Let's break down why this is correct
Answer
A positive externality in consumption happens when someone’s use of a product benefits others who are not directly involved in the transaction. For example, imagine a family that plants a beautiful garden in their front yard. While they enjoy the flowers and plants, neighbors and passersby also benefit from the lovely view and fresh air, even though they didn’t pay for the garden. This situation shows how one person's choice to enhance their property can create enjoyment and improve the environment for the whole community. Therefore, the family's garden is a clear example of a positive externality in consumption, as it positively affects others around them.
Detailed Explanation
When a community builds parks, everyone benefits. Other options are incorrect because This option shows a benefit only for one person; Buying a new car helps one person but can cause more traffic for everyone else.
Key Concepts
Positive Externalities in Consumption
Public Goods
Social Welfare
Topic
Positive Externalities in Consumption
Difficulty
medium level question
Cognitive Level
understand
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