Asked by Kayla Ellison on May 08, 2024
Verified
My neighbor ________ is an example of an external benefit.
A) smoking a cigarette in my presence
B) playing loud music on his radio that I can hear
C) dumping hazardous chemicals on a stream that passes through my property
D) keeping the leaves from his trees away from my yard
External Benefit
A benefit that affects parties other than the buyers or sellers involved in a transaction, similar to a positive externality.
- Understand the concept of externalities and their impact on social welfare.
Verified Answer
CC
Chyna CephasMay 09, 2024
Final Answer :
D
Explanation :
An external benefit, also known as a positive externality, occurs when a third party gains a benefit from an activity that they were not directly involved in. In this case, the neighbor keeping the leaves from his trees away from your yard is an example of an external benefit because it reduces your workload and keeps your yard cleaner without any direct effort from you.
Learning Objectives
- Understand the concept of externalities and their impact on social welfare.
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