Nancy loves to landscape her yard, but her neighbor Tom places a low value on his landscaping. When Tom's grass is neglected and gets long, Nancy will mow for Tom. This is an example of:

Question

Quizplus · Accepted Answer

Nancy is voluntarily taking actions to address the negative externality created by Tom's neglected landscaping. This is an example of a private solution to the problem, as opposed to a government-imposed regulation or tax (option B) or the fallacy of composition (option A). The fact that Tom is lazy (option D) may be a contributing factor, but it is not relevant to the economic concept being illustrated.

Nancy Loves to Landscape Her Yard, but Her Neighbor Tom