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    externalities and alternative fuels

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    Identify any externalities associated with initiatives to develop alternative fuels in the United States.

    How do these externalities affect the market outcome? Is it possible for a government's solution to a market failure to actually worsen the failure?

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    Say for example that ethanol, which is corned based, is chosen as an alternative fuel that the govt wants to invest on. The immediate externality is that it increases de price of corn since its use for fuel competes with its use ...

    Solution Summary

    Solution explains how externalities are associated with initiatives to develop alternative fuels.