Principles of Economics, 7th Edition

Published by South-Western College
ISBN 10: 128516587X
ISBN 13: 978-1-28516-587-5

Chapter 10 - Part IV - Externalities - Quick Check Multiple Choice - Page 213: 1

Answer

c) Hilary's newly cut lawn makes her neighbourhood more attractive

Work Step by Step

A positive externality is a benefit that accrues to a third outside of a trade or exchange. In this scenario, the neighbourhood indirectly gets a positive benefit (perhaps in the form of reputation or attractiveness) from Hillary's direct market exchange with the lawn mower.
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