1.What are external costs? When external costs are present, will market allocation result in too much or too little output of the good relative to the ideal efficiency level? Explain.

2.What is a public good? Provide an example, and explain why it is a public good.

3.What makes a project productive? What makes a project counterproductive? Explain.

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1 External costs refer to the costs or negative consequences of an economic activity that are imposed on third parties who are not involved in the transaction These costs are not accounted for by the ... View the full answer