Suppose that we have 3 consumers. The government considers building a road. It costs $80. The consumers value it at: $20, $40, and $50. Should the government build the road?

Question 6 options:

No, governments should not build roads, cities should do that.

Yes, consumer surplus is larger than the cost.

Consumer surplus is larger than the cost so it is profitable to build the road, but before deciding to build we should check we cannot build something with even higher value to consumers which costs the $80 or less (so we properly consider opportunity costs as well as consumer surplus)

No, consumer surplus is smaller than the cost of building.