Nine friends who love the beach decide to pool their financial resources and equally share the cost of a one-week house rental on Nantucket. Suppose that the beach outside of the house becomes more congested when the nine additional people join the other beachgoers. Which of the following statements is not correct?
a. Use of the beach by the nine new beachgoers will yield a negative externality.
b. The town can reduce the congestion externality by raising the fee to access the beach.
c. An increase in the fee to access the beach could be viewed as a corrective tax on the externality of congestion.
d. Each of the nine friends would have been better off staying at home.
d
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The government of country A has decided to maintain an exchange rate of 1 unit of its currency for 6 U.S. dollars in the long run. Country A can be said to have a:
A) managed exchange rate system. B) fully flexible exchange rate system. C) nominal exchange rate system. D) fixed exchange rate system.
What is the difference between a "change in demand" and a "change in quantity demanded"?
What will be an ideal response?