____ 1. If a positive externality exists, __________ for the socially optimal output to be reached.a. supply needs to decreaseb. demand needs to increasec. demand needs to decreased. a and ce. none of the above____ 2. A negative externality is internalized when __________ until the socially optimum level of production is obtained.a. supply shifts to the leftb. supply shifts to the rightc. demand shifts to the rightd. b and ce. none of the above3. Which of the following statements would a public choice theorist be least likely to agree with?a. The way to genuine reform in this country is to elect really good and moral people to government.b. The people who work for a large government bureaucracy are fundamentally similar to those who work for a private firm.c. A person’s behavior is independent of the institutional setting he or she finds himself in.d. The people who work for private firms are inherently no better or worse than those who work for a large government bureaucracy.