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1. Give four examples of market interactions with externalities: two positive and two negative ones. 2. In each of your examples is the outcome Pareto
1. Give four examples of market interactions with externalities: two positive and two negative ones. 2. In each of your examples is the outcome Pareto efficient or not? 3. In each case explain how possibly we could change incentives of the agents so that they are closer to socially optimal outcome
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