Which of the following creates a positive externality?
A)a paper mill polluting a river
B)a stock market crash
C)a neighbor that beautifies her lawn
D)taxes and subsidies
E)the greenhouse effect

Question

Quizplus · Accepted Answer

Beautifying a lawn can enhance the visual appeal of the neighborhood and increase property values, which benefits other residents who live around that beautified lawn. This is an example of a positive externality. A paper mill polluting a river creates a negative externality because the pollution harms the environment and damages the health and economic well-being of people living in the area. A stock market crash, taxes and subsidies, and the greenhouse effect do not create positive externalities.

Which of the Following Creates a Positive Externality