Your new neighbor does not mow his lawn or prune the trees in his front yard.As a result,your house value decreases.Your neighbor generated
A) a negative externality.
B) a positive externality.
C) no externality.
D) a non-rival good.

Question

Quizplus · Accepted Answer

The neighbor's failure to maintain their yard is having a negative impact on the value of neighboring houses, which is a classic example of a negative externality. A negative externality is defined as a cost that is suffered by a third party as a result of an economic transaction or activity. In this case, the transaction/activity is the neighbor's decision not to maintain their lawn, and the third party is the owner of neighboring houses whose values are decreasing.

Your New Neighbor Does Not Mow His Lawn or Prune