Fill in the blanks to make the following statements correct.
a. The marginal cost faced by the private decision maker is known as _______. The marginal cost faced by the private decision maker plus any other costs imposed on third parties is known as _______. If there is a divergence between these two marginal costs, then we can say that are present.
b. An economic outcome is allocatively efficient when marginal social cost and marginal social benefit are _______.
c. Suppose a potato chip plant is operating beside a residential neighbourhood and produces noise and an unpleasant odour. We can say that there is a _______ externality because the marginal social cost of producing potato chips is _______ the private cost of producing potato chips. As a result, the free market is producing too _______ potato chips.
d. Suppose an apple orchard is operating beside a residential neighbourhood and provides beautiful blossoms and a pleasant fragrance. We can say that there is a _______ externality because the marginal social cost of apples is _______ the marginal private cost of apples. As a result, the free market is producing too _______ apples.