When a real estate developer's actions increase silt in a river, thus making it impossible for boaters to navigate the river, the developer has created a positive externality.

Question

Quizplus · Accepted Answer

The actions of the developer have created a negative externality - an unintended cost imposed on others (boaters) due to the developer's actions. The increased silt has made it impossible for boaters to navigate the river, leading to a loss in their utility.

When a Real Estate Developer's Actions Increase Silt in a River