1. Suppose there is a negative externality in the lemon market. How does the social cost of lemons compare to the private cost? How does the optimal quantity of lemons compare to the market quantity?

2. What does the Coase Theorem say about externalities?

3. What is Cost-Benefit Analysis? Why is it hard to do?

4. What are the 4 types of goods? For each one, say whether they are excludable and whether they are rival in consumption.