a)Explain what is a positive externality in consumption

a) The positive externality of consumption occurs when goods intake generates an advantage for a third party. For example, when we consume education, it is a benefit to society. Education benefits our society through significant contributions in every area like arts, science, and others.

b) Yes, the positive externality provides more benefit to our society.

c) Yes, Government policies compel the market for positive externalities such as;

• Rule for the minimum age of school leaving.
• Government constructing community buildings to improve high standard residential stocks.
• Subsidy to increase demand and to foster consumption