International Agreements on Trade and the Environment a. In panel A, Home enjoys positive production externalities b. In panel B, Home enjoys positive consumption externalities associated with a particular good. Label the supply and social associated with a good. Label the demand and social marginal marginal cost curves on Panel A below. benefit curves on Panel B below. Panel A: Positive production externality Panel B: Positive consumption externality 20 SMC 20 D SMB 19 19 18 18 17 17 16 16 15 15 14 14 13 13 12 12 11 11 10 P. 10 P. 8. 8. 7 7 W W 4 4 3 1 D 1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Quantity Price Price

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