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Externalities: Many economic activities have collateral effects (at times positive, but more often negative) on other people who aren't directly involved in that activity. Illustrations of externalities include pollution (which imposes a cost on natural environment and everyone who uses it), congestion (it slows down travel and productivity) and spill-over impacts of major investment or plant closure decisions.
Deviation - Difference between the expected and actual payoff - Adjusting for the negative numbers - The standard deviation measures square root of average of squa
1. What are externalities? Give an example of positive and negative externality and explain why the market outcomes are inefficient in the presence of externalities? 2. What are
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Which of the following industries do you think are likely to exhibit large economies of scale? Explain why in each case. a. House building b. Electricity generation c. Market ga
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