A beautiful garden that increases the value of the homes in the neighborhood is considered:
A) an inferior good.
B) a positive externality.
C) a negative externality.
D) a normal good.

Question

Quizplus · Accepted Answer

A beautiful garden that adds value to the homes in the neighborhood is considered a positive externality, as it benefits others in the area besides the owner of the garden. It is not an inferior good, as its value is not inversely related to income, nor is it a negative externality, as it does not impose costs on others in the area. It could potentially be a normal good, but the addition of increasing neighborhood value is the defining characteristic that makes it a positive externality.

A Beautiful Garden That Increases the Value of the Homes