Absence of government intervention

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a. Use a diagram to illustrate the deadweight loss that, in the absence of government intervention, results from negative externalities that occur in the production process.

b. Briefly describe a government policy that can partially or entirely eliminate the deadweight loss resulting from negative externalities.

c. Using your diagram and a distributional accounting ledger of the sort we have used in class, indicate the benefits, costs, and transfers that would result from implementing your policy.

Reference no: EM132482313

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