ECONOMICS
MARKET FAILURES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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An increase in the stock market.
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Pollution that gets into our drinking water due to run-off from a nearby factory.
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Better fertilizers that make giant pumpkins.
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bees pollinating your flowers because you live nearby a bee keeper who makes honey
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Detailed explanation-1: -A positive externality is a benefit of producing or consuming a product. For example, education is a positive externality of school because people learn and develop skills for careers and their lives. In comparison, negative externalities are a cost of production or consumption.
Detailed explanation-2: -Bees and Crops This is an example of a positive externality: bee keepers take part in a market for honey; they raise and keep bees in order to harvest honey and sell it to the public. In the process of creating honey, bees fly around and pollinate plants, which enables them to grow.
Detailed explanation-3: -Examples of positive consumption externality An individual chooses to walk or bike to work instead of use their own car or a form of public transportation. This helps reduce the amount of pollution in the air, which greatly benefits everyone else.
Detailed explanation-4: -A positive externality exists if the production and consumption of a good or service benefits a third party not directly involved in the market transaction. For example, education directly benefits the individual and also provides benefits to society as a whole through the provision of more…