Question

Gilberto plants a variety of trees, shrubs, and flowers in his yard. The landscaping beautifies the neighborhood. Which of the following is true?

(A) The cost to Gilberto of planting is a negative externality.
(B) This will generate a positive external.
(C) This will not generate any externalities.

Answer 1

Gilberto's landscaping activities would create a positive externality, which benefits others in the neighborhood without incurring costs to them.

Step-by-step explanation:

The question at hand deals with the concept of externalities, which are outcomes (positive or negative) experienced by third parties who are not directly involved in an activity or transaction. In Gilberto's case, the landscaping and beautification of his yard would create a positive externality, as it enhances the aesthetic appeal of the neighborhood without the neighbors incurring any cost. This positive impact extends beyond Gilberto's property and benefits others in the vicinity. Option b is correct .

An example of a negative externality could be pollution from a factory, where the costs of pollution are suffered by individuals who are neither the producers nor consumers of the factory's products. In this case, the landscaping done by Gilberto beautifies the neighborhood, making it more visually appealing to everyone in the community. The aesthetic improvement of the neighborhood is a positive externality that generates benefits for others.

Answer 2

Gilberto plants a variety of trees, shrubs, and flowers in his yard. The landscaping beautifies the neighborhood. Due to this, a positive external will be generated.

Step-by-step explanation:

So basically Gilberto's planting is creating positive externality because negative externality is when the third party gets negatively affected by production or consumption. Production or Consumption of something, whether third party is directly or indirectly involved.

An example to explain this is smoking cigarettes, a person when smokes not only causes harm to his body but also other people who might not be related to him by passive smoking and also by causing air pollution. But when it comes to planting it is not possible for it to not generate any externality. In fact, it generates positive externality by contributing to the environment.