ePack: Principles of Microeconomics 6th Edition by Gregory Mankiw

Exercise 2

Both public goods and common resources involve externalities.
a. Are the externalities associated with public goods generally positive or negative? Use examples in your answer. Is the free-market quantity of public goods generally greater or less than the efficient quantity?
b. Are the externalities associated with common resources generally positive or negative? Use examples in your answer. Is the free-market use of common resources generally greater or less than the efficient use?