📚 Learning Guide
Positive Externalities in Production
hard

Which of the following are examples of positive externalities in production? Select all that apply.

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Learning Path
Learning Path

Question & Answer
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2
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Choose the Best Answer

A

A beekeeper's honey production that enhances local crop yields

B

A factory polluting a river that negatively impacts local fisheries

C

A tech company developing software that improves local business efficiency

D

A farmer using sustainable practices that enriches soil quality for neighboring farms

E

A restaurant offering free meals that inadvertently boosts local tourism

Understanding the Answer

Let's break down why this is correct

Answer

Positive externalities in production occur when a company's actions benefit others who are not directly involved in its activities. For example, if a factory invests in cleaner technology, it not only improves its own production process but also reduces pollution in the surrounding area, benefiting nearby residents. Another example is when a farmer uses sustainable practices that enhance soil quality; this not only helps the farmer but also improves the land for future farmers and the local ecosystem. These benefits are not reflected in the market price of the goods produced, meaning that society gains from the positive effects of these actions without directly paying for them. Overall, positive externalities create a ripple effect that enhances community wellbeing and environmental health.

Detailed Explanation

Positive externalities happen when a business helps others without trying. Other options are incorrect because This option suggests that honey helps crops, but it doesn't show a clear benefit to others; Pollution is harmful, not helpful.

Key Concepts

Positive externalities in production
Government subsidies and societal welfare
Environmental impacts of production
Topic

Positive Externalities in Production

Difficulty

hard level question

Cognitive Level

understand

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