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    Exam 20: Reasons for Government Intervention in the Market
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    In the First- Best World, Where There Are No Other
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In the First- Best World, Where There Are No Other

Question 12

Question 12

True/False

In the first- best world, where there are no other market distortions, the problem of externalities can be corrected by imposing a tax equal to MSC and a subsidy equal to MSB.

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