Question

Which of the following is an example of a positive externality? Group of answer choices permitting smoking on commercial airplanes raising the speed limit to 60 mph in school zones planting trees along a sidewalk which add beauty and create shade a police department stops enforcing DUI laws

Answer 1

Answer:

The correct answer is letter "C": planting trees along a sidewalk which add beauty and create shade.

Explanation:

Externalities are the effects of the actions of individuals or organizations that influence others without those others having to be involved in the individuals' or entities' activities. Externalities are positive if they benefit others or negative when they affect other individuals.

Thus, planting trees along a sidewalk which adds beauty and creates shade is a positive externality because others benefit from the planting not necessarily being involved in purchasing, planting, or watering the trees.