Question: Please answer the following questions: 1) Explain what is meant by negative externalities. 2) Describe how an over allocation of resources results when negative externalities

Please answer the following questions:

1) Explain what is meant by negative externalities.

2) Describe how an over allocation of resources results when negative externalities costs are present.

3) How this can be corrected by government action.

4)Solve the following using the graph:NegativeExternalities.pdf

Calculate the cost borne to society at equilibrium?

5) What is the cost borne to society after Government increases taxes by $0.50?

6) Start at equilibrium. What is the cost borne to society after Government increases taxes by $1.00?

7) From question 6, how much in terms of quantity must consumers demand less to eliminate the cost borne to society?

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