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hareesh555
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19 Apr 2020, 05:58
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Difficulty:
45%
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Question Stats:
71% (01:41) correct
29%
(00:58)
wrong
based on 14
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According to the Tristate Transportation Authority, making certain improvements to the main commuter rail line would increase ridership dramatically. The authority plans to finance these improvements over the course of five years by raising automobile tolls on the two highway bridges along the route the rail line serves. Although
the proposed improvements are indeed needed, the authority’s plan for securing the necessary funds should be rejected because it would unfairly force drivers to absorb the entire cost of something from which they receive no benefit.
Which of the following, if true, would cast the most doubt on the effectiveness of the authority’s plan to finance the proposed improvements by increasing bridge tolls?
(A) Before the authority increases tolls on any of the area bridges, it is required by law to hold public hearings at which objections to the proposed increase can be raised.
(B) Whenever bridge tolls are increased, the authority must pay a private contractor to adjust the automated toll-collecting machines.
(C) Between the time a proposed toll increase is announced and the time the increase is actually put into effect, many commuters buy more tokens than usual to postpone the effects of the increase.
(D) When tolls were last increased on the two bridges in question, almost 20 percent of the regular commuter traffic switched to a slightly longer alternative route that has since been improved.
(E) The chairman of the authority is a member of the Tristate Automobile Club that has registered strong opposition to the proposed toll increase.
the proposed improvements are indeed needed, the authority’s plan for securing the necessary funds should be rejected because it would unfairly force drivers to absorb the entire cost of something from which they receive no benefit.
Which of the following, if true, would cast the most doubt on the effectiveness of the authority’s plan to finance the proposed improvements by increasing bridge tolls?
(A) Before the authority increases tolls on any of the area bridges, it is required by law to hold public hearings at which objections to the proposed increase can be raised.
(B) Whenever bridge tolls are increased, the authority must pay a private contractor to adjust the automated toll-collecting machines.
(C) Between the time a proposed toll increase is announced and the time the increase is actually put into effect, many commuters buy more tokens than usual to postpone the effects of the increase.
(D) When tolls were last increased on the two bridges in question, almost 20 percent of the regular commuter traffic switched to a slightly longer alternative route that has since been improved.
(E) The chairman of the authority is a member of the Tristate Automobile Club that has registered strong opposition to the proposed toll increase.
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hareesh555
Joined: 10 Apr 2019
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19 Apr 2020, 06:00
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Evaluation of a Plan
Situation A transportation authority plans to pay for improvements to a commuter rail line by raising automobile tolls on the two highway bridges along the route the rail line serves. One objection to this plan is that drivers will have to pay for something from which they will not benefit.
Reasoning What casts doubt on how well the financing plan would work? Any financing plan is based on estimates of costs and revenues, and any factor that significantly increases costs or lowers revenues threatens the effectiveness of that plan. The authority’s plan makes a revenue projection based on the current number of drivers who use the bridges and thus will pay the increased tolls. If there is a precedent that a significant percentage of regular commuters had previously used an alternate route in order to avoid the increased tolls on these specific bridges, then the revenue basis for the financing plan is considerably undermined. If that substitute route has since become an even more appealing alternative, the effectiveness of the plan is further threatened.
A Objections to the plan at public hearings do not affect how well the financing plan will work.
B The one-time costs of changing the automatic toll-collectors would not be significant given the five years of revenue from the increased tolls.
C Revenue lost to token hoarding is insignificant compared to the revenue gained from five years of increased tolls.
D Correct. This statement properly identifies a factor that weakens the authority’s financing plan.
E Opposition to the increased toll can be expected; it does not mean that the plan will be less effective.
The correct answer is D.
Situation A transportation authority plans to pay for improvements to a commuter rail line by raising automobile tolls on the two highway bridges along the route the rail line serves. One objection to this plan is that drivers will have to pay for something from which they will not benefit.
Reasoning What casts doubt on how well the financing plan would work? Any financing plan is based on estimates of costs and revenues, and any factor that significantly increases costs or lowers revenues threatens the effectiveness of that plan. The authority’s plan makes a revenue projection based on the current number of drivers who use the bridges and thus will pay the increased tolls. If there is a precedent that a significant percentage of regular commuters had previously used an alternate route in order to avoid the increased tolls on these specific bridges, then the revenue basis for the financing plan is considerably undermined. If that substitute route has since become an even more appealing alternative, the effectiveness of the plan is further threatened.
A Objections to the plan at public hearings do not affect how well the financing plan will work.
B The one-time costs of changing the automatic toll-collectors would not be significant given the five years of revenue from the increased tolls.
C Revenue lost to token hoarding is insignificant compared to the revenue gained from five years of increased tolls.
D Correct. This statement properly identifies a factor that weakens the authority’s financing plan.
E Opposition to the increased toll can be expected; it does not mean that the plan will be less effective.
The correct answer is D.
19 Apr 2020, 06:00
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hareesh555
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