A positive externality results when
A) economists are sure that a good or service provides benefits to consumers.
B) someone pays for a good or service even though she is not directly affected by the production or consumption of it.
C) when people who live in one country benefit from the production of a good or service that occurs in another country.
D) people who are not directly involved in producing or paying for a good or service benefit from it.

Question

Quizplus · Accepted Answer

A positive externality occurs when the production or consumption of a good or service benefits third parties who are not directly involved in the transaction. For example, a community park may provide enjoyment to residents who did not pay for its construction and maintenance. This creates a positive externality because the benefits spill over to those who did not directly contribute to the park's creation.

A Positive Externality Results When