Economics 9708 · AS & A Level · Maximum and minimum prices

Maximum and minimum prices — practice question

A government uses a cost-benefit analysis to decide whether a new airport should be built. Under which situation will it go ahead with the project?

  • Awhen external benefit exceeds external cost
  • Bwhen private benefit exceeds private cost
  • Cwhen there is a net private benefit
  • Dwhen there is a net social benefit

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