Refer to the information provided in Figure 16.4 below to answer the question(s) that follow.
Los Angeles International Airport (LAX) is located next to Playa Del Rey. The noise from air traffic negatively affects individuals living in Playa Del Rey, however, this cost is not considered by airlines or air travelers. The airlines feel they have a right to use the airspace while the individuals living in Playa Del Rey feel they have the right to quiet. The following diagram depicts the marginal costs and marginal benefits associated with air travel. Figure 16.4
-Refer to Figure 16.4. Suppose the government assigns property rights to ________. No negotiations occur between the parties. The resulting level of air travel is 0 units.
A) the airlines
B) both the airlines and the residents of Playa Del Rey in a 50-50 split
C) the residents of Playa Del Rey
D) indeterminate from the given information.

Question

Refer to the information provided in Figure 16.4 below to answer the question(s) that follow.
Los Angeles International Airport (LAX) is located next to Playa Del Rey. The noise from air traffic negatively affects individuals living in Playa Del Rey, however, this cost is not considered by airlines or air travelers. The airlines feel they have a right to use the airspace while the individuals living in Playa Del Rey feel they have the right to quiet. The following diagram depicts the marginal costs and marginal benefits associated with air travel.  Figure 16.4
-Refer to Figure 16.4. Suppose the government assigns property rights to ________. No negotiations occur between the parties. The resulting level of air travel is 0 units.
A) the airlines 
B) both the airlines and the residents of Playa Del Rey in a 50-50 split 
C) the residents of Playa Del Rey 
D) indeterminate from the given information.

Quizplus · Accepted Answer

When property rights are assigned to the residents of Playa Del Rey, they have the authority to prevent air travel to avoid noise pollution, leading to 0 units of air travel if they choose not to negotiate with the airlines.

Refer to the Information Provided in Figure 16