A positive externality of consumption exists if the consumption of a good or service provides spillover benefits to a third part not involved in the consumption. Give an example of a positive externality of consumption and using that example illustrate using a diagram how government can intervene to ensure that socially optimal quantity is consumed.
A positive externality of consumption exists if the consumption of a good or service provides spillover benefits to a third part not involved in the consumption. Give an example of a positive externality of consumption and using that example illustrate using a diagram how government can intervene to ensure that socially optimal quantity is consumed.
Principles of Economics, 7th Edition (MindTap Course List)
7th Edition
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter11: Public Goods And Common Resources
Section: Chapter Questions
Problem 2PA
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- A positive externality of consumption exists if the consumption of a good or service provides spillover benefits to a third part not involved in the consumption. Give an example of a positive externality of consumption and using that example illustrate using a diagram how government can intervene to ensure that socially optimal quantity is consumed.
- A positive externality of production exists if the production of a good or service provides spillover benefits to a third part not involved in the production. Give an example of a positive externality of production and using that example illustrate using a diagram how government can intervene to ensure that socially optimal quantity is produced.
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