externalities
Are the following statements true or false? Explain why.
. a) (10 points) Competitive markets for goods that create positive externalities result in inefficiently low production of the goods.
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Order Paper Now. b) (10 points) Banning smoking completely will improve efficiency.
. c) (10 points) Since pollution is bad, it would be socially optimal to prohibit any production that creates pollution.
. d) (10 points) Since consumption of alcohol creates additional health risks to those who drink; we can conclude that consumption of alcohol creates a negative externality to society.
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