Question

What kind of externality is present in the market above? Select an answer and submit. For keyboard navigation, use the up/down arrow keys to select an answer.

a. Positive Consumption
b. Negative Consumption
c. Positive Production
d. Negative Production

Answer 1

The correct answer is the option A: Positive Consumption.

Step-by-step explanation:

To begin with, the name of "Externalities" in the field of economics refers to the situation in where an external party that it is outside a certain transaction receives a good or a bad contribution from that operation. That means that when in an economy a transaction between two parties affect a third one then an externality is having place and that could be a good or bad externality that can come from a consumption or from a service. Therefore that there are four types, positive consumption, positive production, negative production and negative consumption.