Question

10. Which of the following are positive externalities:

a.) Commercial fishermen catch too many fish and deplete the stock of fish.

b.)	A property owner fills his front yard with trash and old tires

c.) A group of teenagers play loud music and congregate in a park, making it difficult for other people to enjoy the park

d.)A neighbor keeps his barking dog outside his house all day and all night.

e.) A company develops a new technology for producing its product that can help other companies produce more efficiently.

Answer 1

Option E.

• Positive externality occurs when any transaction made by one party positively benefits the third party rather than negatively impacting them.
• Here when a company develops a new technology for producing it's product's, it results in positive externality as it's action of developing the new technology benefits other companies.
• The other companies who are the third parties can use this new technology to produce their goods more efficiently and increase their productivity.