An Example of a Positive Externality Is

question 89

Multiple Choice

An example of a positive externality is:

• A)pollution because it affects people not directly involved with producing it.
• B)a homeowner's maintenance of a beautiful lawn because this creates a benefit for neighbors.
• C)monopoly creation.
• D)driving a car that emits pollution.
• E)cigarette smoking because this imposes an indirect cost on people around the smoker.

---

Definitions:

Manufacturing Overhead

Represents the indirect factory-related costs incurred when manufacturing a product or providing a service, which cannot be directly tied to a specific product unit.

Designing Products

The process of ideating, creating specifications, and developing prototypes for new products.

Activity Cost Pool

A collection of all costs associated with a particular activity or process, enabling more accurate allocation of overhead costs to products or services.

Product Design Hour

Product design hour refers to the time spent on the creation and planning of new products, from conceptualization to final design.