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Examine the following statements: a)If a product has a positive externatlity effect when consumed, then there will be an over-production of the product and the
Examine the following statements:
a)"If a product has a positive externatlity effect when consumed, then there will be an over-production of the product and the government needs to use a tax to correct the allocative inefficiency."TRUE or FALSE and explain.
b)"If the government imposes a sales tax on a perfectly price elastic product, the burden of the tax is fully on the producer."TRUE or FALSE and explain.
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