Economics (AS & A Level) · Oct / Nov 2022 · Paper 31 · Question 3
9708Private costs and benefits, externalities and social costs and benefits
The Airports Commission in the UK recommended an expansion of airport X rather than airport Y. In considering the social costs and benefits of this decision, what would be taken into account when calculating the external cost?
- Athe additional noise pollution suffered by residents local to airport X
- Bthe financial loss suffered by airlines operating at airport Y
- Cthe increase in profits of the firm operating airport X
- Dthe monetary cost of the construction to expand airport X
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Correct answer: A. the additional noise pollution suffered by residents local to airport X
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