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problem 1a differentiate between positive and

Problem 1:

(a) Differentiate between positive and negative externalities? Justify your answer using examples.

(b) To what extent do government policies influence externality?

Problem 2:

(a) Explain how in economic theory a perfectly competitive firm determines price and output in the long run.

(b) ‘A monopolist is inefficient as compared to a perfectly competitive firm'. Discuss.

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