1. Positive externalities result in?
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2. Negative externalities create _________.
- External costs
- Private costs
3. Merit goods tend to have ________ externalities associated with their consumption
4. If the market does NOT take negative externalities into account the result is that the socially efficient output is ______ than the current output.
5. If only the private costs/benefits were reflected in the price of the product then it would not accurately reflect the true cost, therefore it will lead to either over or under production.