Question: 2. Answer the following questions (60 points): a. Explain and show graphically the Externality theory (15 points) b. Explain and show graphically Private Sector Solutions

2. Answer the following questions (60 points): a. Explain and show graphically the Externality theory (15 points) b. Explain and show graphically Private Sector Solutions to Negative Externalities (20 points). c. Explain public sector solutions to externalities and graphically show Pigouvian tax and subsidy for externalities (25 points). 1 2. Answer the following questions (60 points): a. Explain and show graphically the Externality theory (15 points) b. Explain and show graphically Private Sector Solutions to Negative Externalities (20 points). c. Explain public sector solutions to externalities and graphically show Pigouvian tax and subsidy for externalities (25 points). 1

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