When a benefit of an action falls on other than the person (or persons)responsible for the action,which of the following exists?
A)Positive externality
B)Negative externality
C)Externality in consumption
D)Externality in production
E)External cost

Question

Quizplus · Accepted Answer

A positive externality occurs when an action benefits someone other than the person responsible for the action. For example, when a person plants flowers in their yard, it not only benefits the person but also their neighbors by improving the appearance of the neighborhood. The neighbors did not have to take any action to receive this benefit, hence it is a positive externality.

When a Benefit of an Action Falls on Other Than