Question: 1.Construct a diagram showing a negative production externality. Carefully label your diagram showing the private cost curve, the social cost curve, the private value curve,

1.Construct a diagram showing a negative production externality. Carefully label your diagram showing the private cost curve, the social cost curve, the private value curve, the market equilibrium and the social optimum equilibrium.

2.Carefully explain what you mean by an externality.

3.Clearly explain what you mean by a Public Good and explain why public goods are a form of market failure.

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