A new publicly financed bridge is expected to reduce the cost of car travel between two areas by $1 per trip. This cost reduction to motorists consists of a reduction in travel time, car depreciation and petrol expenses totalling $1.50 per trip, less the $0.50 bridge toll which the government will collect. Before the bridge was built, there were Consumer and producer surplus in cost-benefit analysis 215 215 1 million trips per year between the two areas. Once the bridge is in operation, it is estimated that there will be 1.5 million trips per year between the two areas.

i In terms of areas under the demand curve, what is the annual benefit of the bridge:

a to motorists?

b to the government?

ii What other Referent Group benefits would need to be considered in a social benefit/cost analysis?