QQuestionEconomics
QuestionEconomics
"Which of these is the best example of an externality?
A. You decide to stop snacking between meals.
B. Your shoe store stops selling your favorite style.
C. You enjoy looking at your neighbor's garden.
D. Your new bicycle goes faster than you expected."
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Answer
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Step 1Let's solve this economics problem step by step:
Step 2: Understanding Externalities
An externality is an economic term that describes a cost or benefit that affects a third party who did not choose to incur that cost or benefit. Externalities can be positive (beneficial to others) or negative (harmful to others).
Final Answer
You enjoy looking at your neighbor's garden is the best example of an externality, specifically a positive externality where you receive a benefit (aesthetic pleasure) without directly paying for it.
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