Which of the following are examples of negative externalities? Group of answer choices Your neighbor paints her house and upgrades the landscaping. An airport is constructed to support commerce and travel in your community Trash dumped upstream flows downstream right past your house.

Give an example of a positive externality and an example of a negative externality.

Show the market for cigarettes in equilibrium, assuming that there are no laws banning smoking in public. Label the equilibrium private market price and quantity as Pm and Qm. Add whatever is needed to the model to show the impact of the negative externality from second-hand smoking. (Hint: In this case it is the consumers, not the sellers, who are creating the negative externality.) Label the social optimal output and price as Fe and Qe. On the graph, shade in the deadweight loss at the market output.