6. Suppose that growing flowers produces both a positive externality (people in the neighborhood get to view

Question:

6. Suppose that growing flowers produces both a positive externality (people in the neighborhood get to view the flowers) and a negative externality

(the flowers aggravate peoples’ allergies).

a. True or false, and explain your answer (using a diagram): We can say for sure that too many flowers are being produced.

b. True or false, and explain your answer (using a diagram): We can say for sure that the market price of flowers is too high.

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