First drop down: \"Would not pass\" or \"Would pass\" Second drop down: \"Would

Question

First drop down: "Would not pass" or "Would pass"

Second drop down: "Would not be" or "Would be"

Third drop down: "Would not be" or "Would be"

Fourth drop down: "Would not be" or "Would be"

A town council is considering building a new bridge over a small river that runs through the town to reduce congestion on the existing bridge and reduce commuting times. Each of 1,000 commuters who must cross the bridge would experience a benefit of $16 per day from saving commuting time. The bridge would be financed through increased property taxes that amount to $1 per day for each of the 10,000 households in the town Would the bridge pass a cost-benefit test? The bridge Would building the bridge be a Pareto improvement (relative to not building the bridge)? Building the bridge with the tax Could using tolls instead of taxes to finance the bridge yield a Pareto improvement? If the bridge were financed with tolls on bridge crossings (instead of with the household tax) then building the bridge | the cost-benefit test. | a Pareto improvement | a Pareto improvement. Would using tolls be Pareto efficient? (Assume that the marginal cost of using the new bridge for an extra trip is zero and assume the demand for trips across the bridge is downward-sloping.) Using tolls Pareto efficient.

Explanation / Answer

1) would pass
2)Would be

3)would be, a pareto improvement.

4) Would be, pareto efficient

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