Practise calculating private, external and social costs or benefits, locating market and social optima and evaluating externalities and projects with welfare-loss and…
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?
a downward shift of both the MPC and the MEC curves
a downward shift of the MPC curve and a movement left along the MEC curve
a movement left along both the MPC and the MEC curves
a movement left along the MPC curve and a downward shift of the MEC curve
A
A traffic study concluded that there would be significant benefits if 10\% of car drivers switched to using motorcycles during peak traffic times.
Which benefit of this change would be considered a private benefit?
faster journeys for those who continued to go by car
faster journeys for those who switched to motorcycles
increased safety for cyclists
reduced levels of air pollution for pedestrians
B
A medical team provides vaccinations for children to prevent an outbreak of an infectious disease.
Why would this be described as a positive externality?
Additional benefit might be gained as the disease no longer spreads.
Any kind of medical help will improve the condition of the children.
No action would be taken unless the medical team intervened.
The social benefits of vaccination are less than the social costs.
A