public goods, private goods, common resources and club goods
a) Define public goods, private goods, common resources and club goods. Give an example of each.
(6 marks)
b) What is a negative externality in production and how will this affect the optimal price and quantity in a market? Discuss the effect with the aid of a diagram. In your analysis identify and discuss:
• The competitive market price and quantity.
• The size of the externality.
• The optimum/efficient outcome in terms of price and quantity.
• What are two examples of negative production externalities?
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