ECO - Cost and Benefit Analysis

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  1. We have learnt that CBA (Cost and Benefit Analysis) is not the only method to choose among different public policies. There is an alternative method that uses Pareto efficiency as a criterion for choosing among public policies. Let's call this method the "PE method". Is the following statement true or false? If a policy alternative is chosen according to CBA method, then it will still be the chosen alternative if we instead use PE method. Explain.

 

 

  1. Suppose there are 4 people in an economy: A, B, C and D. A is in love with B, likes C and hates D. B is in love with C, likes A and hates D. C is in love with D, likes A and does not like B. Finally, D is crazy for C, likes B and does not like A. Which of the following couplings is not Pareto efficient? Explain.

a)A dates B, C dates D.

b)A dates C, B dates D.

c)A dates D, B dates C.

    • 10 years ago
    ECO - Cost and Benefit Analysis
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