A change in regulations increases the size of the airplanes that can fly into a local regional airport.The increase in average plane size increases noise pollution considerably.If compensation is to be paid to those harmed by this externality,the most efficient form of compensation would be _____.
A)a lump sum payment
B)a payment per violation
C)a set payment every month
D)regular payments equal to the monthly cost imposed on homeowners

Question

Quizplus · Accepted Answer

A lump sum payment is the most efficient form of compensation because it avoids the administrative costs and inefficiencies associated with monitoring and enforcing payments for each violation or making regular payments, which could vary and require constant reassessment.

A Change in Regulations Increases the Size of the Airplanes