1. Consider testing of chemicals for potential carcinogens. To properly test each chemical costs $100 million. If Q chemicals are tested a typical household places marginal value $(10 - 0.05 xQ) on the ch chemical tested. There are 100 million households in the US. (a) Calculate the social marginal benet schedule. (b) Hence give the optimum number of chemical tests that should be sponsored by the national Institutes for Health. 2.(a) Explain the economic problem that arises due to extemalities. (b) Give an example of a health externality