Solution Found!
Which of the following is an example of a positive externality? a. Dev mows Myra’s lawn and is paid $100 for the service. b. Dev’s lawnmower emits smoke that Myra’s neighbor Xavier has to breathe. c. Myra’s newly cut lawn makes her neighborhood more attractive. d. Myra’s neighbor Xavier offers to pay her if she keeps her lawn well groomed.
Chapter 10, Problem 1(choose chapter or problem)
Which of the following is an example of a positive externality?
a. Dev mows Myra’s lawn and is paid $100 for the service.
b. Dev’s lawnmower emits smoke that Myra’s neighbor Xavier has to breathe.
c. Myra’s newly cut lawn makes her neighborhood more attractive.
d. Myra’s neighbor Xavier offers to pay her if she keeps her lawn well groomed.
Questions & Answers
QUESTION:
Which of the following is an example of a positive externality?
a. Dev mows Myra’s lawn and is paid $100 for the service.
b. Dev’s lawnmower emits smoke that Myra’s neighbor Xavier has to breathe.
c. Myra’s newly cut lawn makes her neighborhood more attractive.
d. Myra’s neighbor Xavier offers to pay her if she keeps her lawn well groomed.
ANSWER:Step 1 of 2
Externality: Externality refers to the spillover of benefits or costs to a third party other than the immediate market participants. An externality can be categorized into positive externality and negative externality.
Mr. D receives $100 for mowing Mrs. M’s lawn. It cannot be considered an externality as it does not have a spillover of benefits to the third party. Mr. D’s lawn mower smoking has a negative externality because Mr. D’s lawn mower actions are causing concern to their neighbors.