Relating to the Economics in Practice on Page 338: Crying

question 132

Multiple Choice

Relating to the Economics in Practice on page 338: Crying babies on an airplane impose a negative externality on those sitting around them. Which of the following policies would help to internalize the externality?

• A) Provide discount tickets for babies and young children.
• B) Evenly disperse the babies and young children throughout the plane so as to minimize the impact of their crying on any one passenger.
• C) Impose a minimum flying age of 5 years old.
• D) Charge a higher ticket fee for babies and young children (under 5 years of age) than for all other passengers.

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Definitions:

State Control

Governmental regulation and oversight of economic and social activities, often to manage resources and ensure public welfare.

Resource Extraction

The process of retrieving raw materials from the natural environment for human use.

Stream of Profits

A continuous flow of earnings generated by a business or investment over a period of time.