Economics 9708 · AS & A Level · 7.4

7.4 — practice question

A city council is thinking about constructing a passenger terminal at its port so that the city may gain from large cruise ships being able to dock there. It carries out a cost–benefit analysis. What item would count as an external cost in the city council’s cost–benefit analysis?

  • Athe cost of a ticket for a passenger to travel on a cruise ship
  • Bthe cost of fuel to operate the cruise ships
  • Cthe costs paid by cruise ships when they dock at the port
  • Dthe cost to a fishing fleet of relocating to another port

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