In class we went over Marginal Social Cost, where a tax should be used to achieve ultimate price and quantity. Afterwards, we went over Marginal Social Benefit, where a subsidy should be used to achieve optimal price and quantity.
The notes and homework are attached below.
Notes - Subsidies (MSB) and Taxes (MSC)
HW - 1995 AP Microeconomics Exam
1995 AP Microeconomics
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