Economics · Market Failure and Externalities
Consider the following pairs regarding the divergence between private and social valuations in market failures: 1. Negative Externality : Marginal Private Cost (MPC) is less than Marginal Social Cost (MSC)2. Positive Externality : Marginal Social Benefit (MSB) is greater than Marginal Private Benefit (MPB)3. Tragedy of the Commons : Private Marginal Cost of access is less than Social Marginal Cost How many of the above pairs is/are correctly matched?
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