QUESTION 6 To reduce traffic congestion the Queensland Government decides to build a new road tunnel between Indooroopilly and Woolloongabba. To minimise traffic delays construction of this tunnel will occur during the night. Which of the following statements is true? The marginal social cost should include the benefits from the reduction in traffic volume as a result of building the tunnel. The marginal social cost of building the tunnel should include the costs associated with the lost hours of sleep suffered by those living near the construction site. The construction will not lead to a deadweight loss, even if externalities are not considered. The Queensland Government should address the negative externalities associated with construction by subsidising the cost of construction. The cost to construct the tunnel captures all economic costs by ensuring the tunnel is only constructed during the night