Economics 9708 · AS & A Level · 7.4

7.4 — practice question

A company made an application to construct a supermarket on the outskirts of a town beside a river. Gaining permission for this required an expensive planning procedure with the local government. To secure approval, the company also agreed to build a bridge over the river close to the supermarket. Which factor would be counted in a social cost-benefit study of this proposal that would not be included in a private calculation?

  • Athe value of the extra customers the supermarket gets by people using the new bridge
  • Bthe value of the land used which could have been used for housing
  • Cthe value of the time of the local government’s officials in the planning process
  • Dthe value of the time saved by people using the new bridge to get to work in the town

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