History is important in explaining why certain industry is concentrated in a certain city (eg. financial industry in New York City, entertainment industry in Los Angeles) in terms of Marshallian externality. () i. true ii. false

An externality, which is sometimes also called a (Spillover OR Social cost) , can have a negative or a positive impact on the third party. An externality occurs when an exchange between a (Buyer and seller OR Population of two cities) has an impact on a third party who (Is not OR is) part of the exchange. For a negative externality, the private costs of an action are (Less or More) than the costs imposed on society as a whole. For a positive externality, the private benefits of an action are (Less or More) than the social benefits. An example of positive externality is (Vccination OR Good wether), whereas an example of negative externality is (Population OR Hurricane)

Describe a positive or negative externality that you have observed in your life. In the example you provide, determine if the externality is positive or negative, explain why, and discuss if you feel like government intervention is present and/or needed. If so, how does (or how could?) the government increase market efficiency?

Externalities can be ________ by collective (i.e.) ________ action. a. enhanced // market b. internalized // market c. internalized // government d. externalized // government