In Which of the Following Situations Would a Positive Externality

question 75

Multiple Choice

In which of the following situations would a positive externality most likely be involved?

• A)Shawn is sitting at home one day when she gets a telephone call, informing her that she has won $10,000 in a contest she entered three months ago.
• B)There are eight houses in the neighborhood where Rodney lives.Rodney likes nice-looking yards, and last week his neighbors began to beautify their yards.
• C)Willy needs eight hours of sleep each night to feel good.Last night he got eight hours of sleep.
• D)Patrick received an A on a biology exam.He is feeling better about his chances of getting admitted to medical school.

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Definitions:

Substitutes

Products or services that can be used in place of each other based on their utility.

Price Elasticity

Price elasticity measures how the quantity demanded of a good is affected by a change in its price, with high elasticity indicating sensitivity to price changes.

Demand

The quantity of a good or service that consumers are willing and able to purchase at a given price over a specified period.

Elastic

Describes a situation where the quantity demanded or supplied of a good is sensitive to changes in its price.