Economics 9708 · AS & A Level · 7.4

7.4 — practice question

The local council calculated the costs and benefits of running a bus service in 2015 and 2016. The figures are shown in the table. 2015 $000 2016 $000 private costs 2000 2200 external costs 500 900 private benefits 1500 2300 external benefits 1000 800 What conclusion can be drawn from the table?

  • ABetween 2015 and 2016, social costs fell and social benefits rose.
  • BBetween 2015 and 2016, social costs rose and social benefits fell.
  • CIn both years, positive externalities exceeded negative externalities.
  • DIn both years, social costs equalled social benefits.

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