Suppose your neighbour has a beautiful garden. The benefit that she enjoys from her garden is called _______ and the benefit the rest of the neighbourhood enjoys is called _______.

Question

Quizplus · Accepted Answer

The benefit the garden owner enjoys is the marginal private benefit, as it directly affects her. The benefit the rest of the neighbourhood enjoys is the marginal external benefit, as it is the positive impact on others who do not own the garden.

Suppose Your Neighbour Has a Beautiful Garden