Q1. [1] medium thorough-understanding
Which of the following BEST explains why the government, and not private companies, typically builds roads, bridges, and large dams?
(A) Private companies lack the technical expertise to construct such infrastructure.
(B) These projects require enormous investment and it is difficult to collect fees from all users, making them unprofitable for private firms.
(C) The government legally prohibits private companies from entering the construction industry.
(D) Private companies prefer to invest in the tertiary sector rather than infrastructure.
- A Private companies lack the technical expertise to construct such infrastructure.
- B These projects require enormous investment and it is difficult to collect fees from all users, making them unprofitable for private firms.
- C The government legally prohibits private companies from entering the construction industry.
- D Private companies prefer to invest in the tertiary sector rather than infrastructure.
Generated by claude-sonnet-4-6 · 2026-06-26 13:24 · grounding rag
Model Answer
(B) These projects require enormous investment and it is difficult to collect fees from all users, making them unprofitable for private firms.
Explanation
The textbook (Chapter 2) explicitly states that construction of roads, bridges, dams, etc. needs "spending large sums of money, which is beyond the capacity of the private sector," and that "collecting money from thousands of people who use these facilities is not easy." This makes such projects unprofitable for private firms, so the government undertakes them. Options A, C, and D are not supported by the text.