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The City of Rochester is thinking of expanding its airport. The expansion will increase travelers' consumer surplus by $100 and airlines' producer surplus by $200, while costing taxpayers only $50. However, the expanded airport will be much noisier. Hearing the noise would impose a $10 cost on each of the airport's 30 neighbors. Can you tell whether the expansion would improve social welfare? Why or why not?

Microeconomics, Economics

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