Use the following to answer questions :
Figure: City with Two Polluters
-Which activity generates a positive externality?
A) You buy a new car and find $5 000 in the door panel.
B) Your next-door neighbour mows the lawn at 6 A.M.
C) Your next-door neighbour installs a bat house,and the bats eat mosquitoes.
D) Joe buys dental insurance but decides not to take the time to get regular checkups.

Question

Use the following to answer questions :
Figure: City with Two Polluters 
-Which activity generates a positive externality?
A) You buy a new car and find $5 000 in the door panel. 
B) Your next-door neighbour mows the lawn at 6 A.M. 
C) Your next-door neighbour installs a bat house,and the bats eat mosquitoes. 
D) Joe buys dental insurance but decides not to take the time to get regular checkups.

Quizplus · Accepted Answer

The installation of a bat house by the neighbour generates a positive externality because it benefits you by reducing the number of mosquitoes in the area, without any cost to you.

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