Step 1: Understanding the Concept:
This is an inference question. The passage promotes private financing by highlighting its virtues. By implication, the problems that private financing avoids are the problems that the alternative, "governmental planning," is prone to.
Step 2: Key Formula or Approach:
Identify the main virtue of private financing according to the author. The opposite of this virtue will be the implied problem with government planning.
Step 3: Detailed Explanation:
- The author praises private financing because it provides a market test. The final sentence sums up this virtue: "If a road appears unlikely to attract enough future traffic to pay for the road, then it should not be built." This implies that private financing prevents the construction of unnecessary or unviable projects.
- The passage also states that private development can be planned "more flexibly and realistically."
- If the virtue of private financing is that it is "realistic" and stops unneeded projects from being built, then the implied problem with governmental planning is that it can lead to unrealistic decisions and the construction of unneeded projects.
- (C) "Unrealistic decisions about developing new infrastructure" is a perfect summary of this implied flaw. A government might decide to build a road for political reasons, even if the traffic demand isn't there, a mistake a private investor would not make.
- (A), (D), and (E) relate to user fees and private financing, not directly to the problems of governmental planning.
- (B) The passage does not suggest that government planning is necessarily slow. In fact, the private venture in the example was very slow to get financing.
Step 4: Final Answer:
The author's praise for the "realistic" nature of private market tests implies that the alternative, governmental planning, is susceptible to making unrealistic decisions to build infrastructure that is not actually needed.