Question

1. when a neighbor pays for landscaping services and creates beautiful scene for you to enjoy, that is an example of a ______ externality.

positive
negative
real
none of the above

Explanation:

A positive externality occurs when a third - party benefits from an economic activity. Here, the neighbor's landscaping (an economic activity as they pay for it) creates a beautiful scene (a benefit) for you (a third - party). A negative externality would be something like pollution from a factory affecting neighbors. A real externality is not a standard term in this context.

Answer:

A. positive