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EC311 · Intermediate Microeconomics

EC311 / TOPIC 41

10.3 Externalities and corrective policy

A teaching model for this topic. Its illustrative numbers may differ from the worked question.

1 Predict → 2 Try → 3 Explain → 4 Challenge

How does unpriced damage cause overproduction?

Illustrative model numbers, not Thailand or current economic data.

Raise damage from zero to 20 with MB and MPC fixed. How does social output compare with market output?