Final answer:
The scenario with the shepherd that benefits from a medical firm dumping antibiotics into the sheep's water supply does not represent a positive externality as it could lead to negative environmental effects and does not constitute a pure benefit.
Step-by-step explanation:
The question asked is "which of the following is not an example of a positive producer to producer externality?" Externalities are costs or benefits that affect a party who did not choose to incur that cost or benefit. Positive externalities occur when a third party benefits from a transaction in which they were not involved. The examples given in the question should be assessed to determine which one does not represent a positive externality.
The correct answer to the question is the scenario with a shepherd that benefits from a medical firm dumping antibiotics into the sheep's water supply making the sheep healthier and able to grow more wool. This instance is not a positive externality because the antibiotics could potentially lead to negative environmental effects, including antibiotic resistance, which imposes a cost on society. Therefore, it does not constitute a benefit to the producer without also creating potential costs, which disqualifies it as a positive externality.
In contrast, the local business benefiting from a new convention center, the apple farmer benefiting from nearby bee pollination, and the computer programming firm that benefits from highly literate computer employees, are all examples of positive externalities because in each case an external benefit is being provided without an associated detraction or cost.