Market Failure, Public Sector and Public Choice

  1. What is the difference between private and social costs?
  2. How can the government intervene to force consumers to internalize external costs associated with: a. negative externalities? b. positive externalities?
  3. Would a tax on prescriptions drugs be more likely to be progressive or regressive? Why?
  4. Is the tax system of America, a fair system? Why? (your explanation should be at least 200 words in length).