Which of the following is an example of a positive externality?
A) A neighbor's flower garden that you enjoy seeing
B) Traffic congestion
C) An increased supply of chocolate lowers chocolate prices for all consumers
D) Pollution

Question

Quizplus · Accepted Answer

A neighbor's flower garden that you enjoy seeing is an example of a positive externality because it benefits individuals who are not directly involved in the activity. In this case, the neighbor gains personal enjoyment from the garden, but the positive effects spill over to the surrounding community who also get to enjoy the beauty of the garden. This is a positive externality because it benefits others without any compensation or cost.

Answer:C 
 An increased supply of chocolate lowers chocolate prices for all consumers is an example of a positive externality because individuals who are not directly involved in the production or consumption of chocolate benefit from the lower prices. The decrease in the cost of chocolate means that other consumers benefit from lower prices without paying any additional cost.

Which of the Following Is an Example of a Positive