Economics 9708 · AS & A Level · Government intervention in markets

Government intervention in markets — practice question

The government is thinking about constructing flood defences along a river. It has worked out the costs and benefits as shown. Using cost-benefit analysis, which decision and explanation about flood defences is correct?

  • ABuild. External benefits are greater than external costs.
  • BBuild. Social benefits are greater than private benefits.
  • CDo not build. Private costs are greater than the external benefits.
  • DDo not build. Social costs are greater than the social benefits.

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