Which of the Following Generates a Positive Externality

question 179

Multiple Choice

Which of the following generates a positive externality?

• A) You buy a new car and find $5,000 in the door panel.
• B) Your next-door neighbor mows the lawn at 6 A.M.
• C) Your next-door neighbor installs a bat house and the bats eat mosquitoes.
• D) Joe buys health insurance but decides not to take the time to get a flu shot.

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Definitions:

Strip Bond

An investment instrument entitling its owner to receive only the face value of a bond at maturity.

Nominal Rate

The stated interest rate of an investment or loan, not adjusted for compounding or inflation.

Population Growth

The increase in the number of individuals in a population, often measured as the rate at which the number of individuals increases over a specific period of time.

Population Decline

A reduction in the number of people in a particular area, which could be caused by factors like low birth rates, high death rates, migration, or disease.