1) Consider a market with demand curve P = 100 - 2Q, and supply curve P = 40 + 2Q. Suppose there is a negative production externality of 20 dollars per unit. What is the deadweight loss of the externality if there is no intervention? 20 30 40 50 2) Consider a market with demand curve P = 100 - 2Q, and supply curve P = 40 + 2Q. Suppose there is a positive production externality of 20 dollars per unit. Which of the following government policies results in a socially optimal quantity in the market? A tax of 10 dollars A subsidy of 20 dollars A subsidy of 10 dollars A tax of 20 dollars.

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