Commuter trains often have quiet cars in which passengers are expected not to play music or engage

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Commuter trains often have “quiet cars” in which passengers are expected not to play music or engage in loud conversations. An opinion poll that asked whether airline passengers reclined their seats found that “half of respondents recline half the time or more, half of respondents do it once in a while or never.” Consider two possible ways that airlines might deal with the externality caused by reclining a seat:
i. Make all seats so that they cannot be reclined.
ii. Have a “no reclining” section on each flight (similar to the quiet cars on commuter trains) in which passengers would not be allowed to recline their seats. Would either of these changes be likely to result in an economically efficient outcome? Briefly explain.

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Macroeconomics

ISBN: 9780135801741

8th Edition

Authors: Glenn Hubbard, Anthony Patrick O Brien

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