Economics (AS & A Level) · Oct / Nov 2022 · Paper 31 · Question 15
9708Private costs and benefits, externalities and social costs and benefits
Too many flights in the airline industry cause unnecessary damage to the environment. Which measure is most likely to result in the socially optimal number of flights?
- Aa complete ban on flights removing all private and external costs
- Bgreater deregulation of the global airline industry
- Cpublishing information to highlight the negative effects of flying on the environment
- Dthe payment of a subsidy per passenger equal to the difference between the private and social benefit
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Correct answer: C. publishing information to highlight the negative effects of flying on the environment
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