Practice Questions
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Which of the following is an example of a positive externality in production related to innovation?
When a company creates new technology that lowers costs, it helps all businesses in that industry. Other options are incorrect because This option sho...
How do subsidies influence positive externalities in production, particularly regarding private benefits to firms?
Subsidies help firms by giving them extra money. Other options are incorrect because This answer suggests subsidies hurt firms; This answer claims sub...
How does innovation in education and training contribute to positive externalities in production?
When education and training improve, workers gain new skills. Other options are incorrect because Some might think that more competition is the main b...
How do positive externalities in production contribute to social welfare and environmental sustainability?
Positive externalities create benefits for people that are not shown in prices. Other options are incorrect because Some might think that positive ext...
How can government intervention effectively enhance positive externalities in the production of education and training programs?
When the government gives tax breaks to private schools, it helps them grow. Other options are incorrect because Cutting funds for public education ca...
Which of the following best describes a positive externality in production?
When a company trains its workers, it helps not just itself but also other businesses. Other options are incorrect because This option suggests harm, ...
Which of the following is an example of a positive externality in production?
When a farmer grows crops, they can create a home for animals. Other options are incorrect because Some might think that factories help by making prod...
How do positive externalities in production contribute to social welfare?
Positive externalities happen when a producer's actions benefit others. Other options are incorrect because Some might think that positive externaliti...
A local bakery decides to use organic ingredients and implement sustainable practices in its production process. As a result, neighboring farmers experience an increase in pollination and crop yields. How does this scenario illustrate the concept of positive externalities in production?
The bakery's eco-friendly choices help the environment. Other options are incorrect because This answer suggests that both the bakery and farmers bene...
Positive externalities in production are to societal benefits as negative externalities in production are to what?
Negative externalities can cause market failure. Other options are incorrect because Some might think that negative effects help producers earn more; ...
A local beekeeper starts producing honey, which leads to increased fruit yields for nearby farmers. Which of the following best describes this scenario?
The beekeeper helps nearby farmers by increasing their fruit yields. Other options are incorrect because This option suggests that people are harmed b...
Positive externalities in production can lead to benefits for __________ who are not directly involved in the transaction.
Third parties are people who are not part of the main deal. Other options are incorrect because Producers are the ones making the goods; Consumers buy...
Which of the following are examples of positive externalities in production? Select all that apply.
Positive externalities happen when a business helps others without trying. Other options are incorrect because This option suggests that honey helps c...
How can positive externalities in production lead to increased government intervention?
When producers create benefits for others, the government may give them money to keep doing it. Other options are incorrect because Some think that po...
If a local beekeeping business increases its production, resulting in more flowers blooming in the surrounding area, what is the most likely underlying cause of this positive externality?
Bees help plants grow by spreading pollen. Other options are incorrect because Lower honey prices do not directly help flowers; Subsidies are money fr...
Arrange the following steps to illustrate the process of how positive externalities in production can lead to government intervention that benefits society: A) Government recognizes a positive externality exists, B) Producers receive subsidies or incentives, C) Increased production leads to greater societal benefits, D) Consumers benefit from improved goods or services.
First, the government sees that something good is happening outside of the market. Other options are incorrect because This order suggests that benefi...
A local brewery produces craft beer, which not only satisfies customers but also generates increased tourism in the area. How should this scenario be classified in terms of externalities?
This situation shows a positive externality in production. Other options are incorrect because A negative externality happens when a business harms ot...
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