Which of the following is an example of a positive externality?

A positive externality occurs when an economic activity produces benefits for third parties who are not directly involved in that activity. Increased property values due to education improvements is a prime example of this concept. When a community invests in educational enhancements, such as better schools or educational programs, it not only benefits the students attending those schools but also raises the property values in the area. This occurs because families generally seek to live in areas with high-quality education options, leading to increased demand for housing and subsequently higher property values.

In contrast, the other options represent negative externalities, where the unintended consequences harm others. Air pollution from factories negatively affects the health and quality of life of nearby residents. Disease spread from unhealthy eating can have widespread impacts on public health, burdening healthcare systems and affecting individuals not directly involved in the choices made by others. Traffic congestion due to overpopulation leads to increased travel times and frustration for all drivers, impacting productivity and overall quality of life. Thus, the correct choice highlights an instance where an activity generates positive outcomes for the broader community.