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Practice Problems

Hello all,

In the practice problems of the 14th reading, the third question associates external costs with overproduction as an obstacle to efficiency. Yet in the text, the only obstacles to efficiency listed which were explained as over-productive were taxes and subsidies and public good.

Am I missing something here?

Thanks in advance,

SJ

Page 48 - 2nd paragraph - Externalities - external costs lead to overproduction

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