Which of the following expenditures to enhance productivity is most likely to emit a positive externality?

Question

a. Megabank buys a new computer.
b. Exxon leases a new oil field.
c. Susan pays her college tuition.
d. General Motors buys a new drill press.

Answer 1

The expenditure most likely to emit a positive externality is:

c. Susan pays her college tuition.

When Susan invests in her education, she increases her own productivity and earning potential. However, this also has broader societal benefits, including a more educated workforce, increased innovation, and potentially higher economic growth, which are positive externalities that benefit others beyond just Susan herself.