A beekeeper decides to locate her business on a plot of land that is between an apple orchard and an elementary school. A positive externality that can result is
A) the cost of the bee hives to the beekeeper.
B) the possibility of the bees stinging the students at the school.
C) the bees helping to pollinate the orchard, leading to more fruit.
D) the honey the bees produce.

Question

Quizplus · Accepted Answer

The bees helping to pollinate the orchard, leading to more fruit, is a positive externality because it benefits the orchard owner without them incurring any cost for the pollination service.

A Beekeeper Decides to Locate Her Business on a Plot