Question: Question 1 [25 marks] a) Explain the concept of 'externality and distinguish between the different types of externalities that one might encounter in the real

Question 1 [25 marks] a) Explain the concept of 'externality" and

distinguish between the different types of externalities that one might encounter in

Question 1 [25 marks] a) Explain the concept of 'externality" and distinguish between the different types of externalities that one might encounter in the real world. (10 marks) b) Should Pigouvian taxes be used to internalise the negative external effects of obacco and alcohol consumption? (10 marks)

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