Asked by Quintin Volpe on Jun 17, 2024
Verified
Your upstairs neighbor is the first-chair violinist in the local symphony orchestra. Because you are very fond of violin music, you sit on your balcony each night to listen to her rehearse. In this case, your violin-playing neighbor 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 Benefit
A positive effect or advantage that extends beyond the direct participants of an economic transaction to affect others who are not involved in the transaction.
First-Chair Violinist
The lead violinist in a symphony orchestra, often responsible for playing solos and leading the violin section.
Symphony Orchestra
A large ensemble of musicians, typically including strings, woodwinds, brass, and percussion, performing classical and other types of music.
- Ascertain the relevance of externalities and their implications for market effectiveness.
- Discriminate between costs and benefits that arise internally and those that occur externally.
Verified Answer
DS
Donna ShepherdJun 20, 2024
Final Answer :
C
Explanation :
Your neighbor's violin playing is an example of a good that provides an external benefit because you derive enjoyment from listening to her rehearsals without directly paying for it or consuming a resource that would otherwise be used by someone else. This is known as a positive externality.
Learning Objectives
- Ascertain the relevance of externalities and their implications for market effectiveness.
- Discriminate between costs and benefits that arise internally and those that occur externally.