A positive externality affects market efficiency in a manner similar to a ?
Correct answer: B. public good
- A. rival good
- B. public good
- C. private good
- D. common resource
Explanation
A positive externality creates benefits for people who are not directly involved in the transaction, resembling the spillover benefits of a public good. Markets tend to underproduce goods with such benefits.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
Practise Microeconomics
1,742 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Microeconomics questions
A negative externality affect market efficiency in a manner similar to ?
Which of the following is an example of a common resource ?
If a person can be prevented from using a good, the good is said to be ?
A free rider is a person who ?
Public goods are difficult for a private market to provide due to ?
A good produced by a natural monopoly is ?