Question

You are a birder (birdwatcher) and your neighbor has put up several birdhouses in her yard and also planted trees and flowers that attract birds. Is this an example of a negative or a positive externality? Select the correct answer below: positive externality negative externality both a positive and negative externality neither a positive nor a negative externality

Answer 1

Positive externality

Step-by-step explanation:

In economics, there are generally two different types of externality named as a positive and negative externality.

Positive externality: In economics, the term "positive externality" is described as a phenomenon that occurs when the production or consumption of a specific good leads to create a benefit to any third party.

Example: A particular beekeeper who tends to keep the bees as they produce honey.

In the question above, the given statement represents positive externality.