Which of the following is an example of an activity generating a positive externality?
A)You buy a new car and then find $5,000 in the door panel.
B)Your next-door neighbor mows the lawn at 6 A.M.
C)Your next-door neighbor installs a bat house and the bats eat mosquitoes.
D)Joe buys health insurance but decides not to take the time to get a flu shot.

Question

Quizplus · Accepted Answer

Installing a bat house helps control the mosquito population, which benefits not only your neighbor but also the entire community by reducing the spread of mosquito-borne diseases. This is an example of a positive externality, where the benefits spill over to people who are not directly involved in the activity.

Which of the Following Is an Example of an Activity