Question

Essay questions

3. Suppose that a city is considering building a bridge across a river. The bridge will be financed
by tax dollars. The city gets those revenues from a sales tax imposed on things sold in the city.
The bridge would provide more direct across for commuters and shoppers. It would alleviate the
huge traffic jam that occurs every morning at the bridge down the river in another city. Please
answer questions 3a through 3c below:
3a. Who would gain if the bridge were built? Could those gains, or benefits, be measured?
How?
3b. Who would be hurt if the bridge were built? Could those costs be measured? How?
I
3c. How would you determine if it were efficient to build the bridge?

Answer 1

3a. The people who would gain from the bridge being built are commuters and shoppers, who will benefit from the decrease in traffic jams and more direct route across the river. These benefits could be measured by calculating how much time and money they will save, as well as by surveying the opinions of these people.

3b. The people who would be hurt if the bridge were built include those who would no longer use the bridge down the river in another city, as well as those who would pay the sales tax which finances the bridge. The costs could be measured by calculating the amount of sales tax money paid by the citizens, as well as by surveying the opinions of those who would be affected.

3c. To determine whether it is efficient to build the bridge, you would need to calculate the total cost of the bridge, including the cost of materials, labor and other resources. You would then compare this cost to the total benefits derived from the bridge, such as time and money saved for commuters and shoppers. If the total benefits outweigh the total costs, then it would be efficient to build the bridge.