Question

What is actually considered a benefit in economics?

A city government is considering building a new system of lighted bike paths. A councelor supporting their construction lists the following as potential benefits of the paths: 1) more enjoyable bike rides for current and future bikers, 2) reduced rush-hour automobile traffic due to increases in bike commuting, and 3) the creation of 15 construction-related jobs. Can all of these actually be considered benefits? Explain.

Answer 1

1) The benefit should be possible to measure in terms of money.

2) arguments 2 and 3 from the councelor can be considered benefits.

Step-by-step explanation:

The benefit should be possible to measure in terms of money.

Like revenue, cash flow, job creation, reduce of cost, elimination of cost, increase in productivity per factor and so on.

The acceptance of the view for the bike riders is not measurable in terms of money. We cannot determinate the additional utility in cash for a better view

While we can determinate the lower cost in terms of CO2 emmisions (which have a cost) the time-savings for the people can also be estimated. This will reduce the time on highway for people going to work, and time is money. This increase productivity. Public transport can potentially decrease their times if less automobiles are in the streets.

The construction-related job are also a benefit as will increase the GDP.