Classification of positive and negative externality.

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Chapter 10, Problem 1QCMC

To determine

Classification of positive and negative externality.

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Which of the following is an example of a positive externality? 1. Dev mows Hiliar's lawn and is paid 100 dollars for performing the service? 2. while mowing the lawn, Dev's lawnmower spews out smoke that Hilary's neighbor has to breathe? 3. Hilary's newly cut lawn makes her neighborhood more attractive? 4. Hilary's neighbor's pay her if she promises to get her lawn cut on a regular basis?

There is often litter along highways but rarely in people's yards. Which of the following statements help explain this observation? Check all that apply. A. When a person litters along a highway, others bear the negative externality of having to clean it up. B. No one cares if there is litter on the highway. C. Littering in your own yard imposes costs to you, so you are less likely to do it.

a. Jerome has a beautifully landscaped front lawn with lots of colorful flowers. Landscaped lawns produce a landscaped lawns exist relative to the socially efficient quantity. externality. b. Dave takes advantage of the low price of gas to purchase a sports utility vehicle. Sports utility vehicles generate a externality. sports utility vehicles are produced relative to the socially efficient quantity. c. Susan decides to walk to work instead of driving. Walking to work creates a walks to work exist relative to the socially efficient quantity. externality. d. Anita decides to smoke a cigarette while she is waiting at a busy bus stop. Cigarettes create a cigarettes are produced relative to the socially efficient quantity. externality.