4. Greater consumption of alcohol leads to more motor vehicle accidents, and, thus, imposes costs on people who do not drink and drive. I am going to assume that this is a negative production externality. a. Illustrate the market for alcohol, labeling the demand curve, the supply curve, the social cost curve, the market equilibrium of output, and the efficient level of output. Please see \"Negative Production Externalities\" from Externality Summary b. On your graph, shade the area corresponding to the deadweight loss of the market equilibrium. (Hint: the deadweight loss occurs because some units of alcohol are consumed for which the social cost exceeds the social value) Explain. Please see Graph #6 \"Negative Production Externalities\" from Externality Summary 1. What are Corrective Taxes? Why do economists prefer them to regulations as a way to protect the environment from pollution? Hint: this question came straight from the textbook. You can find the answer to this question in your textbook, in the videos, or online. 2. List some of the ways that the problems caused by externalities can be solved without government interventions? Hint: this question came straight from the textbook. You can find the answer to this question in your textbook, in the videos, or online. 3. Consider the market for fire extinguishers. 3. Why might fire extinguishers exhibit Positive externalities? b. Draw a graph of the market for fire extinguishers, labeling the demand curve, the social-value curve, and the supply curve. Please see Graph #2 \"Positive consumption externalities" from Externality Summary c. Indicate the market equilibrium level of output and the efficient level of output. Give an intuitive explanation for why these quantities differ. d. If the external benefit is $10 per extinguisher, describe a government policy that would yield the efficient outcome. 5. Bruno loves playing rock'n'roll music at high volume. Placido loves opera and hates rock'n'roll. Unfortunately, they are next-door neighbors in an apartment building with paper- thin walls. No graphs needed here. Please review materials on Command-and-control polices and the Coase Theorem. a. What is the externality here? b. What Command-and-control policy might the landlord impose? Could such a policy lead to an inefficient outcome? c. Suppose the landlord lets the tenant do whatever they want. According to the Coase Theorem, how might Bruno and Placido reach an efficient outcome on their own? What might prevent them from reaching an efficient outcome