The town of Penrith in western Sydney is debating whether to build a new motorway from its new airport to the city centre. The city surveys its citizens and finds that, on average, each of the one million residents values the new highway at a value of $20 and the estimated cost to construct the highway is $10 million.

ECON t3 BAS11 A T3 2020 FEX - Word X Home Insert Design Layout References Mailings Review View ? Tell me what you want to do.. Sign in & Share File 6 Cut Find * A A Aa- A AaBbCcDc AaBbCcDc AaBbCcDo AaBbCc AaBbCct Aa B AaBbCCC AaBbCCD BB Copy "ac Replace Paste B I U - abE X, X' A - Z - A . = = = = 1. ~. . 1 Normal 1 No Spac... 1 Table Pa... Heading 1 Heading 2 Title Subtitle Subtle Em... 41 Format Painter Select Clipboard Font Paragraph Styles Editing Question 4 (5 marks) Type in your answer in the space provided below. Part A (5 marks) The town of Penrith in western Sydney is debating whether to build a new motorway from its new airport to the city centre. The city surveys its citizens and finds that, on average, each of the one million residents values the new highway at a value of $20 and the estimated cost to construct the highway is $10 million. You are required to: a) Assuming the survey was accurate, is building a new motorway efficient? Briefly explain. (1 mark [Answer here] [ It is efficient b) Briefly discuss under what conditions would private industry build the road? (1 mark) [Answer here C) Should the town of Penrith build the road? On average, how much should it increase each resident's tax bill to pay for the road? (1 mark) Answer here] d) Is it certain that building the motorway is efficient? That is, what are the problems associated with using cost-benefit analysis as a tool for deciding whether to provide a public good? Briefly discuss. (2 mark) [Answer here] + 90% Page 6 of 11 116 of 1767 words 11:16 PM Type here to search O WE 1/14/2021