Representative John Murphy Has Secured Around $200 Million of Federal

question 264

Multiple Choice

Representative John Murphy has secured around $200 million of federal government money for a small airport near Juneburg, PA, that averages about 30 passengers a day. The costs of this government support:

• A) represent an external cost paid mostly by taxpayers who will never use the airport.
• B) are well justified given that the benefits of the airport are locally concentrated.
• C) are well justified given that the residents near the airport would pay little of the cost.
• D) represent an external cost paid mostly by taxpayers who will begin to use the airport once it is completed.

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Definitions:

Direct Labour

The wages or salaries paid to employees directly involved in producing goods or providing services.

Variable Manufacturing Overhead

Costs that fluctuate with the level of production output, such as utilities and supplies used in the manufacture of a product.

Fixed Costs

Expenses that do not change with the level of production or sales over a short period, such as rent or salaries.