Assume the following graph represents some sort of market externality.
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Question 1
1.
What type of externality is this? (Select all that apply)
Question 2
2.
Given this externality, the market price is too __________, so the goal of the government should be to __________the market price.
Question 3
3.
At the private quantity, __________, __________
Question 4
4.
What type of government policy should be used to correct this externality? (NO EXPLANATION! JUST ANSWER THE QUESTION!)
Question 5
5.
Provide 2 letters that represent your answer to #4. (More than one answer is possible, but I only want ONE pair of letters.)
Question 6
6.
Instead of your policy solution in #4, the government could use a __________ at __________. As a result, this would create a __________. The government could also use a __________ at quantity __________
