Orchards provide services to beekeepers because the bees use the pollen to make honey. This is an example of
A) a positive externality, and too many orchards exist in society.
B) a positive externality, and too few orchards exist in society.
C) a negative externality, and too many orchards exist in society.
D) a negative externality, and too few orchards exist in society.

Question

Quizplus · Accepted Answer

This is a classic example of a positive externality, where the beekeepers benefit from the presence of orchards, even though they do not pay for the service. In this case, too few orchards may be present in society as they are not being incentivized to exist due to the lack of direct financial gain for the orchard farmers.

Orchards Provide Services to Beekeepers Because the Bees Use the Pollen