Problem
I. 1. What is the difference between a positive externality and a negative externality? Describe an example of each.
2. Why does an otherwise competitive market with a negative externality produce more output than would be economically efficient?
II. 1. Why does an otherwise competitive market with a positive externality produce less output than would be economically efficient?
2. When do externalities require government intervention, and when is such intervention unlikely to be necessary?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.