A council supplies a free public library service. It is considering using the same resources to maintain public parks or repair local roads, and expects park maintenance to bring the greater benefit.
Which benefit does the council give up by supplying the library service?
The council's spending on the library service itself
The benefit residents would gain from repairing local roads
The benefit residents would gain from maintaining public parks
The benefit people gain from borrowing books at the library
127 exam-style questions on OCR GCSE Economics 3.8 Limitations of markets, covering 3.8.1 Positive and negative externalities, 3.8.2 Policies to correct externalities, 3.8.3 Impact of externality policies, and 3.8.4 Costs and benefits of externality policies. Each one has a worked solution and a mark scheme showing where the marks go.