Calculate the efficient pigouvian tax

Reference no: EM131132321

Calculate the efficient Pigouvian tax to correct the externality in worked-out problem 20.1 (page 758). Show graphically and algebraically that, with this tax, the competitive equilibrium will be efficient.

Problem 20.1

Give three examples of negative externalities and three examples of positive externalities.

Reference no: EM131132321

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