A-LevelEconomicsGovernment microeconomic intervention9708/12 · Oct/Nov 2015 · Q161 Mark
A cost-benefit analysis of a proposed underground railway produced the following statistics. annual costs and benefits $ million annual capital cost 10 operating and maintenance costs 3 fare revenue 6 savings to private travellers 5 savings to business 10 other economic benefits 7 What can be concluded from the statistics? [Table 16.1]
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AIf undertaken by the private sector there would be a loss of $13 million.
BIf undertaken by the private sector there would be a profit of $3 million.
CIf undertaken by the public sector there would be a net social benefit of $15 million.
DIf undertaken by the public sector there would be a net social cost of $1 million.
✓ Correct answer
C: If undertaken by the public sector there would be a net social benefit of $15 million.
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