Which of the following is an example of a positive externality?
A) Nick spends $500 to landscape his yard and his property increases in value by $1,000.
B) Mick spends $500 on a stereo, which he plays so loudly that his neighbors are willing to pay him $1,000 not to play the stereo.
C) An increase in the demand for computers causes IBM to hire more workers.
D) Complaints of speeding cause police to increase surveillance.
E) Lisa puts new concrete on her driveway and now the neighboring kids use it for skateboarding.

Question

Quizplus · Accepted Answer

Positive externalities occur when a third party benefits from the actions of others without paying for it. Lisa's new concrete driveway benefits the neighboring kids who use it for skateboarding, representing a positive externality.

Which of the Following Is an Example of a Positive