Question

Which of the following are private benefits that do not equal social benefits? These have beneficial effects on property value (i.e. proximity to parks, high quality schools, notable architecture).

a) positive externalities
b) negative externalities
c) pro rata
d) asymmetric information

Answer 1

Private benefits that don't equal social benefits but affect property values are known as positive externalities. They include effects like enhanced property value due to high-quality schools or parks, which also benefit society at large.

Step-by-step explanation:

The private benefits that do not equal social benefits and have beneficial effects on property value are known as positive externalities. These include various factors such as proximity to parks, high-quality schools, and notable architecture that can improve a property's value. These improvements benefit property owners but also can have benefits for society, such as aesthetic enhancements, better education outcomes, and increased public enjoyment. These societal benefits are not directly reflected in the property owner's financial gains. A market demand curve typically reflects only the private benefits and not the social benefits. Positive externalities are benefits that spill over to third parties and thereby increase social welfare.