A manufacturer pays a training provider to teach its employees new production skills. Several of the trained employees later leave to work for other firms in the same area.
Which of the following is a positive externality of the training?
The manufacturer produces more output from its trained employees
The training provider earns revenue from the manufacturer's fee
Other local firms gain workers who already have the new skills
The manufacturer pays the full cost of the training course
127 exam-style questions on OCR GCSE Economics 3.8 Limitations of markets, covering 3.8.1 Positive and negative externalities, 3.8.2 Policies to correct externalities, 3.8.3 Impact of externality policies, and 3.8.4 Costs and benefits of externality policies. Each one has a worked solution and a mark scheme showing where the marks go.