Positive externalities are:
A)similar to negative externalities in their ease of measuring marginal benefits.
B)likely to be solved with the use of a Pigouvian tax.
C)difficult to measure, since marginal benefits are hard to observe.
D)result from greater than optimal production of a good.

Question

Quizplus · Accepted Answer

Positive externalities are difficult to measure because the marginal benefits are not directly observed on the market. For example, planting trees in a neighborhood may have positive externalities such as cleaner air, but the benefits are not reflected in market prices.

Positive Externalities Are