When benefits are experienced by someone other than the consumer a ______________ occurs.
A)a positive externality
B)a negative externality
C)marginal benefit
D)marginal cost

Question

Quizplus · Accepted Answer

A positive externality occurs when a third party benefits from the consumption or production of a good or service, but does not pay for it. This means that the social benefit of the good or service is greater than the private benefit experienced by the consumer. Examples of positive externalities include education and vaccination, where the individual benefits but society as a whole benefits even more.

When Benefits Are Experienced by Someone Other Than the Consumer