Missing markets

Question 1

A new orbital motorway has been proposed for a major city, but there is a debate about whether it is really needed and who should pay for it.

1. Analyse the likely costs and benefits associated with this motorway.

2. Consider alternative ways to fund the building and maintenance of this motorway.

3. Since the late 17th Century lighthouses have helped ships safely navigate coastal waters at night.

• Why are free markets unlikely to construct and maintain lighthouses?

• Explain how lighthouses could be funded without markets