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A.Questions on "Externalities" (15 points; No Plagiarism)

1.What is the difference between a positive externality and a negative externality?

2.Give an example of positive externality and negative externality.

3.What do economists mean by "internalizing an externality"?

4.Distinguish among marginal social costs, marginal external costs, and marginal private costs.

5.List two approaches used to solve the problem of externalities.