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SOLVED:What type of externality (positive or negative) is present in each of the following examples? Is the marginal social benefit of the activity greater than or equal to the marginal benefit to the individual? Is the marginal social cost of the activity greater than or equal to the marginal cost to the individual? Without intervention, will there be too little or too much (relative to what would be socially optimal) of this activity? a. Mr. Chau plants lots of colorful flowers in his front ya
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SOLVED: In the context of energy supply, describe how the existence of a negative production externality may lead to a socially inefficient outcome. Critically analyze a Pigovian solution aimed at internalizing this type of externality.
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