Analysis of externality.
a)What type of externality does the graph below represent? Using the letters provided find out social welfare under the market outcome and the socially optimal outcome. Describe and show the deadweight loss
b) Read the article I posted on Blackboard regarding tradeable gasoline rights (TGR) and answer the following problems:
1) Discuss how the TGR system would function.
2) describe why is the TGR system superior to the government imposing gas standards or gas taxes?