5. Why are negative externalities and positive externalities also called spillover costs and spillover benefits? Show graphically

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5. Why are negative externalities and positive externalities also called spillover costs and spillover benefits? Show graphically how a tax can correct for a negative externality and how a subsidy to producers can correct for a positive externality. How does a subsidy to consumers differ from a subsidy to producers in correcting for a positive externality? LO3

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Essentials Of Economics

ISBN: 9780073511313

2nd Edition

Authors: Stanley L. Brue, Campbell R. McConnell, Sean M. Flynn

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