If all my neighbors have well-manicured lawns and well-maintained houses,their actions not only benefit themselves,but they generate a _____ externality because their actions _____the value of my home.
A)negative;increase
B)negative;decrease
C)positive;increase
D)positive;decrease

Question

Quizplus · Accepted Answer

A positive externality is the positive impact that an individual's actions have on the well-being of a third party. In this case, the well-maintained houses and lawns of the neighbors increase the value of the home of the speaker, which is a positive externality. Thus, the best choice is C.

If All My Neighbors Have Well-Manicured Lawns and Well-Maintained Houses,their