A positive externality occurs when
A)Jack receives a benefit from John's consumption of a certain good.
B)Jack receives personal benefits from his own consumption of a certain good.
C)Jack's benefit exceeds John's benefit when they each consume the same good.
D)Jack's receives a loss from John's consumption of a certain good.

Question

Quizplus · Accepted Answer

A positive externality occurs when there is an external benefit to a third party who is not involved in the production or consumption of a good or service. In this case, Jack is benefiting from John's consumption, which qualifies as a positive externality.

A Positive Externality Occurs When