Economics 9708 · AS & A Level · 7.4

7.4 — practice question

A project incurs a social cost of $100 million, a private cost of $40 million and an external benefit of $20 million. Its net social value is zero. What conclusion can be drawn about the project?

  • AExternal cost is greater than external benefit.
  • BPrivate cost is greater than external cost.
  • CPrivate cost is greater than private benefit.
  • DSocial cost is greater than social benefit.

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