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Pecuniary externalities do
not imply market failure , and are not true externalities (FREC 424
Natural Resource Economics )
INCLUDEPICTURE \d "lec03-1 .gif " Externalities and Government
Intervention :
In industrialized economies , Government revenues come mainly from direct
taxes on personal income and company profits , indirect taxes on
purchases of goods and services , and contributions to state run social
security schemes . The government spends money on public goods because
there is a market failure when public goods are left entirely to private
markets . Thus...














