Question

QUESTION 7 Paul works at the UQ Swimming Pool Complex in the cafe. Management of the Pool Complex has a policy that all Pool Complex staff must be trained in CPR. To save money, management is considering cutting this training. Kids Alive is a charity interested in pool safety. One policy of Kids Alive is to encourage more people to obtain CPR training. Which of the following statements are true: UQ Pool's management decision to train its staff in CPR is likely to be a positive externality for Kids Alive. 1fUQ Pool's management decision to train its staff in CPR is a positive externality for Kids Alive, it may be willing to pay the UQ Pool to support its staff CPR training program. O UQ Pool's decision to cut CPR training would logically produce an efficient outcome for management The marginal social benefit curve, when CPR training is given to all staff, would lie to the left of the marginal private benefit curve

Answer 1

Ans

B is right. It's is positive externality for kids alive in the sense that uQ pools training increases its utility because utility of kids as live depends on pool safety which increases with training. Further this is effect of third party action. Thus kids alive will like to pay uQ pools