Asked by Almaz Gulilat on Jun 26, 2024

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Your next-door neighbor has a beautiful rose garden, but you are allergic to roses and cannot use your yard because of the rose pollen that drifts into your yard. In this case, the rose garden is an example of a

A) public good.
B) good that imposes an external cost.
C) good that provides an external benefit.
D) Pareto good.

External Cost

A cost that is not borne by the producer or consumer directly involved in a transaction, but rather by a third party or society as a whole, such as pollution.

Allergic

Pertains to medical and biological contexts, indicating adverse immune responses of the body to certain substances, known as allergens.

Rose Pollen

The fine powder produced by the male parts of a rose flower, necessary for the fertilization process in plant reproduction.

  • Identify the importance of externalities and their impact on market efficiency.
  • Distinguish between internal and external costs and benefits.
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TK
Tania KatherinJun 30, 2024
Final Answer :
B
Explanation :
The rose garden is an example of a good that imposes an external cost because it negatively affects you (due to your allergy) without you having a direct role in its creation or maintenance. This is known as a negative externality.