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In: Economics

The average weight of American adults increased by about 10 pounds in the 1990s. In November...

The average weight of American adults increased by about 10 pounds in the 1990s. In November of 2004, it was reported that U.S. airlines spent $275 million more in fuel costs to transport this additional weight. Under what circumstances would this increased cost be an externality of obesity, and under what circumstances would it not be an externality?

Solutions

Expert Solution

This is not an externalitu this is because of the fact that the additional cost as a result of one organisation should Inka to that of the society but here the society is having an additional cost on the airline companies and it is the reverse case which is why it is not an externality and in order to compensate this their allies would already have increased the prices.


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