Economics (AS & A Level) · May / June 2021 · Paper 32 · Question 3
9708Private costs and benefits, externalities and social costs and benefits
A government is choosing between four routes for a new road. The table provides details of the costs and benefits associated with each route. The government wants to get the highest return for taxpayers in terms of the social benefit relative to the private cost. Which route will the government choose?
- Aprivate costs 20, private benefits 25, external benefits 5
- Bprivate costs 25, private benefits 30, external benefits 10
- Cprivate costs 20, private benefits 25, external benefits 10
- Dprivate costs 30, private benefits 35, external benefits 10
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Correct answer: C. private costs 20, private benefits 25, external benefits 10
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