Economics (AS & A Level) · Oct / Nov 2023 · Paper 32 · Question 9
9708Private costs and benefits, externalities and social costs and benefits
In recent years, the fuel cost of operating a jet aircraft has declined. Over the same period, improved design has led to much quieter aircraft. How would this affect the marginal private cost (MPC) and the marginal external cost (MEC) of air travel?
- Aa downward shift of both the MPC and the MEC curves
- Ba downward shift of the MPC curve and a movement left along the MEC curve
- Ca movement left along both the MPC and the MEC curves
- Da movement left along the MPC curve and a downward shift of the MEC curve
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Correct answer: A. a downward shift of both the MPC and the MEC curves
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