Economics 9708 · AS & A Level · 7.4

7.4 — practice question

A government is planning to construct an athletics stadium for the World Games. The stadium would involve high private and external costs, yet it would also raise national pride. Why would it be hard to use cost-benefit analysis to decide whether the stadium should be built?

  • AThe materials needed to build the stadium will need to be imported.
  • BThe external costs of clearing land for building will outweigh the private costs.
  • CThe stadium will not be used much for athletics after the World Games.
  • DThe valuation of national pride will be complex to assess.

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