Which of the following is a positive externality?

a) New car prices go down when steel tariffs are removed.

b) Production costs are reduced when waste disposal laws are not enforced.

c) Assistance is given to disaster victims.

d) A star basketball player increases revenue at sports bars.

A positive externality occurs when a private individual's actions have a beneficial impact on bystanders. D is an example of a positive externality. The star basketball player presumably goes to a sports bar because he wants dinner or a drink. He makes this decision only thinking about himself and his personal needs. However, people that follow him (fans, sportswriters, etc.) may also go to this establishment because he is. This positively impacts the owner who receives additional profits from an increase in business.