O-LevelEconomicsThe allocation of resources2281/11 · May/June 2016 · Q61 Mark

Developers want to increase the size of a major retail shopping area in a city. It is thought that the proposal would create hundreds of jobs, be profitable for the shops but cause major traffic congestion. What economic concepts are directly involved in this statement?

Aexternal cost and private benefit

Bincome distribution and inelastic demand

Cprivate investment and a decrease in supply

Dsocial benefit and perfect competition

✓ Correct answer

A: external cost and private benefit

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2016 Paper 1 Variant 1, question 6.

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