Positive Externalities

What is the equilibrium price and quantity of "Nice Trees" in the market without considering external benefits?

• 10 dollars per tree, 1 million trees

• 20 dollars per tree, 2.7 million trees

• 30 dollars per tree, 3 million trees

• 40 dollars per tree, 3.5 million trees

Which of the following is NOT mentioned as an external benefit of planting "Nice Trees"?

• Pest control

• Improved air quality

• Increased property value

• Aesthetic value

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When the external benefit of $10 per tree is factored into the market for "Nice Trees", how does the demand curve change?

• It shifts downwards by $10.

• It shifts upwards by $10.

• It becomes steeper.

• It becomes flatter.

What type of government intervention is suggested to encourage the planting of "Nice Trees" to reach the socially optimal quantity?

• Imposing a tax on tree planting.

• Providing a $10 tax credit for planting a tree.

• Setting a price ceiling on trees.

• Banning the sale of "Nice Trees".