If Paul improves the landscape of the house by planting new grass,trimming the trees,and adding a fence,making the value of his house go up,which the following will happen?

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Quizplus · Accepted Answer

The neighbors will benefit from the externalities created by Paul's improvements. His landscaping and fencing will improve the aesthetic value of the neighborhood, which can increase the value of their homes as well. However, there is no evidence to suggest that Paul will be less happy or that the neighbors will be forced to improve their own homes. The marginal social benefit will likely exceed the marginal cost of Paul's improvements, as he is making the neighborhood more desirable for everyone.

If Paul Improves the Landscape of the House by Planting