O-LevelEconomicsThe allocation of resources2281/11 · May/June 2018 · Q61 Mark

A government approved the construction of a new railway line connecting major cities. It would be built by a private company but be funded partly through taxation. It would create many jobs. People living on the route worried about the harm to their environment. Which concepts are directly involved in this statement?

Aexcess demand and public corporation

Bgovernment subsidies and perfect competition

Cmarket system and income distribution

Dprivate benefit and external cost

✓ Correct answer

D: private benefit and external cost

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2018 Paper 1 Variant 1, question 6.

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