Which of the Following Describes a Positive Externality

question 1

Multiple Choice

Which of the following describes a positive externality?

• A)John Henry paints the outside of his house in order to increase its market value just before he puts the house up for sale.
• B)People who do not attend college still benefit from others who receive a college education.
• C)The government imposes a tax on cigarettes in order to discourage smoking among teenagers.
• D)Mary volunteers to drive her neighbor's children to soccer practice.

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Definitions:

Capacity To Act

The legal ability of a person to enter into contracts and engage in binding agreements.

Agent To Do

Refers to an individual or entity appointed to act on behalf of another (the principal) in dealings with third parties, within the scope of authority granted by the principal.

Mutual Fiduciary Duties

Obligations between parties that require them to act in each other's best interests, often found in relationships like partnerships and between corporate directors and shareholders.

Agents And Principals

A relationship in which one party (the agent) is authorized to act on behalf of another (the principal) in dealings with third parties.