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:

Monopolist's Output

The quantity of goods produced by a monopoly to maximize its profits, considering its market power.

Marginal Cost

The additional cost incurred by producing one more unit of a good or service, critical in decision-making processes regarding output levels.

Excess Profits

Profits that exceed the normal expected return on investment, often resulting from monopoly power or a unique competitive advantage.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.