Answered: A government is considering building a…

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter11: Public Goods And Common Resources

Section: Chapter Questions

Problem 10PA

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Question

A government is considering building a new highway. The project will reduce traffic congestion and promote economic growth, but it will also incur significant construction expenses and environmental impacts. Which of the following statements best describes the decision-making process the government should use? Question 7Answer a. Approve the project if the construction expenses are lower than the environmental impacts. b. Approve the project only if the economic growth benefits are greater than the reduced traffic congestion benefits. c. Approve the project only if the marginal benefits exceed the marginal costs. d. Approve the project if the total benefits are greater than the total costs, regardless of the magnitude of the difference.

Definition Definition Increase in the amount of goods and services produced by a country in a given period of time compared to an earlier period. Economic growth is generally coupled with a rise in national income or the purchasing power of individuals. It is often measured in terms of the increase in a country's gross domestic product (GDP), or the overall monetary value of all the complete or final services and goods that a country can produce within its domestic boundaries in a specific period.

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