Multiple Choice
Ten friends who love to ski decide to pool their financial resources and equally share the cost of a one-week time-share condominium in Alta, Utah. Suppose that the lift lines at the ski resort become more congested when the ten additional people start to ski. Which of the following statements is not correct?
A) Use of the ski resort by the ten new skiers will yield a negative externality.
B) The ski resort can reduce the congestion externality by raising lift ticket prices.
C) An increase in lift ticket prices could be viewed as a corrective tax on the externality of congestion.
D) Each of the ten friends would have been better off staying at home.
Correct Answer:
Verified
Correct Answer:
Verified
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